Air New Zealand feeling the pinch over fuel prices

[ozziekiwi]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12167037

[ECAMACTIONSCOMPLETE]

https://www.forbes.com/sites/daneberhart/2018/11/28/yes-it-is-possible-for-oil-prices-to-be-too-low/#6217032a241b

are they worried that they’ll be too low? $50 a barrel at the moment

[ozziekiwi]

Probably find another fare increase is in the wind

[gordonfvckingramsay]

Amateurs!

Can't wait for the QF response to higher fuel prices. They can't have the cabins any less comfortable on the ground that's for sure.

[Rated De]

Amateurs!

Can't wait for the QF response to higher fuel prices. They can't have the cabins any less comfortable on the ground that's for sure.

“Every airline gets the benefit (of lower fuel prices) but Qantas is outperforming the rest of the market. And it’s only because of transformation that we have these strong results.”

Little Napoleon beamed in FY15 as Qantas outperformed the market. The savings they achieved were a result of a large price fall of jet fuel, the commodity they use disproportionately more of than their peers! Save expense they did, recording a handsome 'transformation' profit. The ICCT was interested too:

https://www.abc.net.au/news/2018-01-17/qantas-fuel-efficiency-worst-for-trans-pacific-flights-study/9333616

Confronting the present rise in fuel prices, Little Napoleon always ahead of the pack (certainly with remuneration) fleet not so much, has enacted a 'strike team'.
This strike team located in the bowels of QCA are working night and day on a super secret project. Re-enforced with consultants, they are close to a new project title.
The project itself rumoured to be RTC (Reduced Thrust Cruise). This includes in-flight shutdown. Marketing is apparently awash with catch phrases, and scouts have been sent out looking for a kid's choir.

It is also rumoured that the Floyd and Harry, otherwise known as Rupert and John are heading to the antipodes from Hong Kong hoping to learn a new trick or two!

[Blitzkrieger]

This includes in-flight shutdown

Bahahaha! Reduce the maintenance costs a little more and this may happen automatically ;-) Win win!

[StudentInDebt]

Purely out of interest from something I have read on BALPA’s (UK Pilot union) forums are Air New Zealand placing A320 pilots on unpaid leave as a consequence of cost saving measures?

[BO0M]

Purely out of interest from something I have read on BALPA’s (UK Pilot union) forums are Air New Zealand placing A320 pilots on unpaid leave as a consequence of cost saving measures?
Haha very very unlikely given they cant crew the ones they currently have.

[ElZilcho]

Purely out of interest from something I have read on BALPA’s (UK Pilot union) forums are Air New Zealand placing A320 pilots on unpaid leave as a consequence of cost saving measures?


Not exactly.

Regional (T-Prop) Pilots have been resigning in droves due to Air NZ hiring Jet Pilots externally rather than internally. In order to squash this, T-Prop Pilots are getting reserved seniority numbers on the Jet list on a 70/30 ratio with each external hired. Effectively, these Regional Pilots are on "LWOP" from the Jets while continuing their T-Prop position.

[Rated De]

Not exactly.

Regional (T-Prop) Pilots have been resigning in droves due to Air NZ hiring Jet Pilots externally rather than internally. In order to squash this, T-Prop Pilots are getting reserved seniority numbers on the Jet list on a 70/30 ratio with each external hired. Effectively, these Regional Pilots are on "LWOP" from the Jets while continuing their T-Prop position.

What ought be increasingly evident to even the most stubborn apologist for the HR/IR model is that the supply is a BIG problem.
Denied career opportunities pilots left the industry, those remaining are older. The new starts lumped with huge debt, no longer see a 'return on investment', thus are insufficient in number. The same thing airline management crowed about year after year: 'Return on Investment', as they drove down remuneration (due ample supply) that bit further has gone full circle.

In demographics is destiny.
Eventually, management will be forced to re-classify airline pilots as a 'strategic asset'. Career path and remuneration will follow, or Operating Revenue starts shrinking further. Not like the idiots in administration can do a pilot's job now can they?

[Blitzkrieger]

Eventually, management will be forced to re-classify airline pilots as a 'strategic asset'. Career path and remuneration will follow,

At the moment the only thing standing in the way of this happening is the “I’ll do anything for a jet job” types. Every agreement being negotiated from now on needs to consist of a log of claims followed by an application for PIA. Once pilots understand the powerful position they’re in, fuel prices going up will be the least of the airlines problems.

[mattyj]

It makes me wonder if someone at corporate towers blew a bundle setting up next years hedging strategy?? Fuel was up for a time but now it’s on the way through the floor. Perhaps they rolled the dice on it continuing to rise

[Lapon]

I would have thought that with half the NZ wide body fleet grounded the fuel bill would not be looking too bad at all?

[ElZilcho]

It makes me wonder if someone at corporate towers blew a bundle setting up next years hedging strategy?? Fuel was up for a time but now it’s on the way through the floor. Perhaps they rolled the dice on it continuing to rise

Hard to say, but taking the article at face value (my bold):

While fuel prices have retreated from four-year highs it reached in October the damage was done earlier in the year.
Luxon said fuel would make up the largest component of operational costs at $1.3 billion this year, up from $987 million last year and $827m the year before.

The International Air Transport Association jet fuel monitor shows global prices in mid-November were 13.4 per cent higher than at the same time a year ago.

Fluctuating fuel prices have contributed to the airline's share price volatility. Shares have ranged from $3.41 to $2.62 during he last 12 months.


So it appears to be a case of recovering from higher prices earlier in the year and hedging to reduce the damage of fluctuations in the next Fiscal year.
Add in the 787 restrictions on routing and the broken Auckland Fuel pipeline seeing us with Fuel stops in Australia/South Pacific, it makes sense we've had a hefty fuel bill this year.

[kiwi grey]

Purely out of interest from something I have read on BALPA’s (UK Pilot union) forums are Air New Zealand placing A320 pilots on unpaid leave as a consequence of cost saving measures?

Unless they are grounding the whole airline for the equivalent of Annual Shutdown, the Holidays Act would make that extraordinarily difficult.
Since I haven't seen the QANTAS CEO this side of the Tasman, I reckon grounding the whole airline is a tad unlikely.

In other words ... no they aren't

[Rated De]

Unless they are grounding the whole airline for the equivalent of Annual Shutdown, the Holidays Act would make that extraordinarily difficult. Since I haven't seen the QANTAS CEO this side of the Tasman, I reckon grounding the whole airline is a tad unlikely.

Brilliant!

Takes a few months of narrative building, framed with Chairman's lounge membership and huge advertising spend...
All before you call your airline 'terminal'