Fuel Price
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Join Date: Oct 2002
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Fuel Price
For how long can a low-cost airline continue to be a low-cost airline with the fuel price rising like these days?
This is quite a new scenerio. I do not think so many expected such a rise after the US tried to keep the Gulf area under control!!
This is quite a new scenerio. I do not think so many expected such a rise after the US tried to keep the Gulf area under control!!
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There really is a lot of false information around about the price of oil and the war in Iraq. Without going into too much detail, the price (of crude) is set by OPEC, not by the US, who as a net importer can only really move the price by a small amount. (by relaeasing oil from their strategic reserve to increase supply) Opec keep cutting production to maintain the price of crude towards the upper end of their "price basket". Iraq's current (and predicted future) crude output can be perfectly well served by ports at Basrah and Khor-al Amaya, and the pipeline to the Ceyhan terminal in Turkey.
With regard to the original question posted (concerning the price of Jet, these are current and historical prices delivered FOB Rotterdam (ie European prices) ($/ton):
8-11 March 312.38
1-5 March 322.05
23-27 Feb 320.80
1Q 03 321.60
2Q 03 244.11
3Q 03 263.57
4Q 03 297.95
Therefore Jet is currently cheaper than it was in the 1st quarter 2003. Put that together with the current pound/dollar exchange rate, and UK airlines are paying significantly less for Jet this year than they were at the same time last year.
With regard to the original question posted (concerning the price of Jet, these are current and historical prices delivered FOB Rotterdam (ie European prices) ($/ton):
8-11 March 312.38
1-5 March 322.05
23-27 Feb 320.80
1Q 03 321.60
2Q 03 244.11
3Q 03 263.57
4Q 03 297.95
Therefore Jet is currently cheaper than it was in the 1st quarter 2003. Put that together with the current pound/dollar exchange rate, and UK airlines are paying significantly less for Jet this year than they were at the same time last year.
Union Goon
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Furthermore,
Airlines like Southwest have significant hedging programs in place to the effect that they have already purchased all their fuel through about 2006 at 24 dollars per barrel max...
Cheers
Wino
Airlines like Southwest have significant hedging programs in place to the effect that they have already purchased all their fuel through about 2006 at 24 dollars per barrel max...
Cheers
Wino
