Oil down to $59

[Mr A Tis]

Tuesday 11th Nov, oil prices now dropped to $59 a barrel.
Have many carriers hedged at over $100 ?? & is there a get out for those that have ? ............just asking.
With this dramatic fall in oil prices , shouldn't the big guns be removing their fuel surcharges??

[philbky]

Not if they bought at $100+

[Nashers]

hopefully it stays down there for a while as we bloody well need a break in this industry.

i hope it goes down at the pumps as well pretty darn quick!

[northern boy]

If it drops much further OPEC are likely to restrict supply and the greenies will start howling for higher fuel taxes again.:mad:

Can't bloody win can you?

[eastern wiseguy]

I just looked on the Aer Lingus website for a price DUB-ORD in AUGUST 2009 and they still have a Fuel Surcharge of 70 euros each leg.....:hmm:

[TartinTon]

Airlines who've hedged anywhere above $90 are still going to have to surcharge as they are locked into that price. It will be interesting to see how the Easy vs Ryan battle is waged this year as Easy are 50% hedged at something around $120 whereas Ryan are 0% hedged for summer with the current forward price at $77-ish. That's a massive advantage especially when you have 40 extra seats to throw at your opposition as well.

You have to hand it to ol Micky, he's either got the luck of the Irish or he's bloody smart.

[harrogate]

Air Asia launched their big 'no more fuel surcharges' marketing campaign today. They're giving away a load of free seats too.

Maybe that'll trigger Qantas and the domestic Aussie services to drop theirs, as well as some of the Asian carriers, particularly the locos.

[cabot]

According to BBc this morning oil had dropped to as little as $55 a barrel yeasterday but is currently at $58.46

[fimbles]

interesting to see how the Easy vs Ryan battle is waged this year as Easy are 50% hedged at something around $120 whereas Ryan are 0% hedged for summer with the current forward price at $77-ish. That's a massive advantage especially when you have 40 extra seats to throw at your opposition as well.

You have to hand it to ol Micky, he's either got the luck of the Irish or he's bloody smart.

Except:

They were unhedged over the period when fuel was >$100 and they have hedged their 3rd quarter requirement at $129. Moving into the 4th Q they have hedged at 70ish (another thread on PPrune)

EasyJet were hedged quite low when spot prices were high over the summer but have indeed hedged 50% of the 2009 requirement at $1225 / metric tonne -not sure what 'spot' price this would equate to but same to say its probably the wrong side of £100 a barrel.( they have also hedged a lot of their next years £/$ exposure at 1.97 which is well smart and will go some-way to negate this if fuel stays low)
That said they are currently taking advantage of the lower levels on a month by month basis.

Hind insight is a wonderful thing but don't forget what MOL recently said that he wanted to hedge at these lower levels going well forward but the banks and oil companies aren't going to take a punt and get their fingers burnt. So even though spot prices/ barrel are low, going too far forward is unlikely at these levels!

Its just the old roundabout and swings deal!!

[GROUNDHOG]

The oil price drop is great news but of course it must be tempered by the exchange rate for any airline earning in UKL. A few weeks ago you could get two dollars worth of gas for your pound today at one time that dropped to below one dollar fifty!

most leases are also of course in USD.

Rearrange the following into a well known saying.

woods out not of yet the.......

[teifiboy]

Groundhog has hit the nail on the head. Oil trading is done in US Dollars. Not only has the price of a barrel plummeted, the dollar has strengthened dramatically against the pound (from nearly $2 to below $1.50) which has helped to negate the benefits of falling oil prices for British carriers.

[Air Mail]

In July 08, a barrel of oil was about $130 and the exchange rate was about 1.98 so a barrel cost about £65.65

Today, a barrel for December 08 is about $57 and the exchange rate 1.48, making a barrel £38.51

Last week, the average price of jet a1 was about $84.7 a barrel or $667 a tonne.

[BYALPHAINDIA]

Quote
Oil down to $59
Tuesday 11th Nov, oil prices now dropped to $59 a barrel.
Have many carriers hedged at over $100 ?? & is there a get out for those that have ? ............just asking.
With this dramatic fall in oil prices , shouldn't the big guns be removing their fuel surcharges??

Reply
The 'Storms' not over yet by a long way!!

It will only be a matter of months or a year, Before the prices go up again?

Add that now, To the 'Escalating' recession which is now taking hold.

[BYALPHAINDIA]

Quote
You have to hand it to ol Micky, he's either got the luck of the Irish or he's bloody smart.

Reply
Like a Race Horse winner, The Irish are traditionally good at that too!!