Nick
Well-Known Member
Delta announced a couple new of those odd-ball type routes again. RDU-ALB was a CRJ, maybe you guys are doing that as well.
Regionals and Oil this summer
- Thread starter MikeOH58
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Delta announced a couple new of those odd-ball type routes again. RDU-ALB was a CRJ, maybe you guys are doing that as well.
Minuteman
Moⅾerator
The funny thing is: RJs burn less fuel per seat-mile than larger aircraft (for regional routes). If you assume the specific thrust and aerodynamics are comparable, a larger percentage of the takeoff weight is payload than on the larger, longer-range aircraft.
It seems like it's all the other per-unit costs that don't vary as much by size that keeps the CASM relatively high. Crew costs and fuel prices could be squeezed to subsidize that side of things.
It seems like it's all the other per-unit costs that don't vary as much by size that keeps the CASM relatively high. Crew costs and fuel prices could be squeezed to subsidize that side of things.
kellwolf
Piece of Trash
Why not? We've been doing RDU-MCO and RDU-TPA for a while. We're also gonna be doing MIA-MCO, MIA-TPA and I think MIA-JAX.....
I agree with everything but this. They control the supply much more than many people think. When they feel like they need to make a larger profit, they cut back on the refining of oil and create a false shortage, supply drops, and prices spike. The thing that trading has done is de-stabalize the prices of oil. Remember when oil prices were steady, not the wild fluctuations we now see? It's not felt as bad in states outside of California and New York where gas isn't $3.35 a gallon already. Last week in Texas, I was able to find gas $0.50 cheaper than what it is here in CA. It's the worst price fixing scheme that exists today and is let to be because so many politicians are in the oil companies pockets.
kellwolf
Piece of Trash
But what do you classify as a "regional route?" Something like DTW-FNT or MSP-DSM, I agree. I've been doing more and more big city to big city flying. Where 100% of the payload is there and we leave people and baggage behind. I don't know if we're suplementing routes or what, but I KNOW JFK-ORD can handle more than 50 people. Most of the time, we're weight restricted out of JFK anyway because of the insane amount of fuel we have to take with us. Seems to me they could actually put more than 50 people on a larger airplane and make more money. Percentages are great, but if you start hitting too much overspill (as in you're losing people to other carriers because you're not running enough seats between city pairs), you're losing more potential revenue than you're saving. In those cases, I could aboslutely see the CRJ being parked or shifted to other routes if the price of oil goes sky high. Wouldn't bother me in the slightest. I'd rather move up than stay at the regional level biting my fingernails every 5-10 years when the air services agreement is up....
amjon
Pilot and A Half (for now
I couldn't agree with you more. Normally I am against government regulation, but in this case oil effects the price of every other product on the market. It has become the greatest single force causing hardship on Americans. (I wouldn't be surprised if it also greatly contributed to our recession/ depression as well.) They regulate telephone service (which you can live without), yet something that is required for everything is not. Along with that line, why is the media not blaming Obama now for the huge spike in price for no apparent reason? When Bush was in office it was ALWAYS his fault.
Barty
Well-Known Member
Forcing entities buying oil futures to actually take delivery (ie., they can't simply just sell the contracts after bidding the prices up) would suffice.
Otherwise, our weak dollar is a problem as well. Low interest rates plus a government that can't stop spending to save itself just keeps making the situation worse.
Hootie
Old Skool
caliginousface
Frank N. Beans
GAH! Go post somewhere else. Your happines is not welcome round heya!
Seriously though, I see just the opposite. The oil companies know what they can get away with now. They are like a 4yr old. They go right up to the limit, and then just beyond, to see what happens and if they can get away with it.
Two things need to happen.
#1: Oil Futures trading needs to stop. Look at what it's doing to the price of a barrel and the backlash it has on the economy.
#2: More oversight of oil companies. Like I said in my previous post, no one is really watching what the oil companies are doing to generate their profits. The straw that broke the camels back IMO when this recission started was oil prices. When it comes down to paying the mortgage, or putting gas in the car, most put gas in the car, and it's a domino effect that self fuels. If you can't get to work, you can't pay the mortgage. And I am only a few dollars shy this month, so if I put some gas in my car, I can make up the difference. But next month, I'l be a little more short, and the months after that, etc., etc.
If the dollar strengthens, oil may come down. But the numbers that we see are inflated, feel good statistics. We created just over 151k jobs last month, but there is still 5 million out of work, so we haven't even made a dent.
I don't mean to sound all doom and gloom, I'm just being real about it.
http://losangeles.cbslocal.com/2010/11/05/jobs-boost-helps-but-millions-still-unemployed-at-risk/
You're right, lets be real about it. Let's end oil subsidies too so we aren't paying for artificially lowered gas prices. I'm seriously all for that.
E_Dawg
Moderator
Everyone thinks they know what's gonna happen but the truth is no one does. Not the airline execs and definitely not the pilots. It does appear that some sort of major growth is around the corner but remember the airline industry is typically the first to be hurt by an economic downturn and the last to recover. And the pilot shortage was right around the corner in the late 90s as well; all that ended up happening was stagnation at the majors along with the transformation of 'commuters' into regionals and the lower pay that goes with it.
And for the "perfect storm" argument (economy, sept 11, age 65, gas prices) well there are always going to be unforseen influences...
And for the "perfect storm" argument (economy, sept 11, age 65, gas prices) well there are always going to be unforseen influences...
Pilotforhire587
Lycra Man
I think there will be a hiring wave, whether or not it is as big as people are talking about or how it will end I dont know... Only time will tell.
The US people have a price point where fuel cost to their vehicle's start changing what they will spend money on. I think it depends on where you are at in the country. Out west here we already have $3.75 and above fuel for 91 octane. Cheapest I have seen is $3.21. And I have seen/heard people already talking about not doing things, because of fuel cost. My bet is oil hits high $90's and come racing down back into the $70's becasue our economy can not withstand that level yet.
kellwolf
Piece of Trash
That's kinda how I see it. Even with the price of oil going up, the price at the pump didn't vary more than a nickle the whole time in my area. The last time it happened, the price was changing daily.
ryan1234
Desensitized Member
I would tend to agree with you. If you look at the product of many businesses post 2008, they've leaned themselves out and have somewhat adapted in a macro sense to a diminished market... but who knows.. could be a bunch of different scenarios: Alarmism, etc.
As has been said before... time will tell.
ryan1234
Desensitized Member
Oil Futures and Derivatives Markets in general are somewhat misunderstood by most of the public. It's easy to watch CNN or MSNBC and hear that futures trading is the culprit for our demise.
Derivatives Markets (futures, forwards, options, etc) are akin to betting on the outcome of a football game. Does betting actually influence the outcome of a Football game? No, not really, unless the players are motivated by the bets indirectly. Oil production may be stored or produced based on market predictions indicated by futures trading. Generally what happens is when futures prices go up, production goes up.... which leads to a greater supply, lower prices down the road. On the other side of the coin, the incentive to store oil goes up when oil futures prices are high relative to spot prices.
There is an effect on storage that oil futures has. For example, up until the 'crash' in 2008 oil future prices were less than the spot prices, creating an incentive pull oil out of storage and onto the market. By doing this, it actually softened the spot price of oil. This is clearly seen by the end of 2008 when oil prices were crashing. That cycle caused oil futures to be considerably higher than spot prices... which encourages storage - softening a complete collapse.
What many do not understand is that there was actually a lack of storage capacity before 2008, which never grew as fast as the oil market itself. When lawmakers cut down on speculation, they effectively make storage less attactive.... which will in turn increase the volatility of the physical commodity prices (i.e. at the pump).
kellwolf
Piece of Trash
I understand what certain types of regulation would do, and see the point about lack of storage. However, what would forcing those that buy futures to actually take delivery of the product do? In most cases, if you buy something with the intent of reselling it, you have that voice in the back of your head saying "I need to sell this or I'm gonna be stuck with it." On the futures market it seems like there's always a way to pawn it off on some other person willing to take a chance.....who in turn can pawn it off on someone else, etc, etc. If I buy a rare coin on eBay with the intent of re-selling it, I can't just push it to another eBayer if the price suddenly goes the other way. I have to pay for it, get the coin and then turn around and sell it.