Airline Fuel question

"Colin W Kingsbury" wrote in message
ink.net...

"Doug Carter" wrote in message
. ..
paul kgyy wrote:
International oil is priced in dollars, so the crash in dollar values
(caused by US budget deficits)has reduced (or at least kept level with
recent crude price hikes) the cost of fuel for people who can pay with
Euros, Pounds, Yen, you name it.

That is really silly. I don't even think Paul Krugman could rationalize
that.

Any company that is involved in international financial flows of any
volume
(i.e. 10s of millions plus) is going to be doing some pretty serious
hedging
anyway. Basically, you want to completely wipe out currency fluctuations
since over time they are just as likely to hurt as to help (see the overly
strong US Dollar of the late 90s for example).

I used to work for a division of the German company Bertelsmann here in
the
US and whenever money was moved across the ocean, it was done at an
"internal exchange rate" that was always way behind the rates you'd see on
CNBC.

We could also have a good argument over chicken and egg here. If the value
of the dollar goes down, and oil is priced in dollars, then it is
mathematically predictable that the price of oil will rise accordingly.
That's how commodities work.

Yes, but fuel prices are still WAY different.

The appropriate analogy to the foreign airlines is NOT theUS airlines, but
AMTRAK.


--
Matt
---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.
Montrose, CO

"Matt Barrow" wrote in message
...

We could also have a good argument over chicken and egg here. If the
value
of the dollar goes down, and oil is priced in dollars, then it is
mathematically predictable that the price of oil will rise accordingly.
That's how commodities work.

Yes, but fuel prices are still WAY different.

Experts figure that around $5-$12/bbl is an "uncertainty premium" due to
Middle East worries. The rest is due to economic growth in Asia, namely
China. This is only going to get worse, until somewhere above $70/bbl where
we hit a ceiling as shale oil, of which supplies are enormous, becomes
profitable to extract.

The appropriate analogy to the foreign airlines is NOT theUS airlines, but
AMTRAK.

Agreed, though an important fact is that many foreign airlines enjoy
quasi-monopoly status in certain markets. That is one heck of a subsidy.
Also, most foreign airlines are primarily international carriers, which is
simply a more profitable market. I suspect that most US airlines turn a
profit on their international routes. One sign of this is that business
class is almost never sold at a discount for tickets originating in the US.
It's full J-fare or coach.

-cwk.

"Colin W Kingsbury" wrote in message
ink.net...

"Matt Barrow" wrote in message
...

We could also have a good argument over chicken and egg here. If the
value
of the dollar goes down, and oil is priced in dollars, then it is
mathematically predictable that the price of oil will rise
accordingly.
That's how commodities work.

Yes, but fuel prices are still WAY different.

Experts figure that around $5-$12/bbl is an "uncertainty premium" due to
Middle East worries.

I'm talking about USA compared to Europe (and how, despite the difference,
the foreign airlines "make money".

You chopped the conclusion I reached, in that the analogy is not US to
foreign airline, but foreign airlines and Amtrak!


--
Matt
---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.
Montrose, CO

"Colin W Kingsbury" wrote in message
ink.net...

"Matt Barrow" wrote in message
...

We could also have a good argument over chicken and egg here. If the
value
of the dollar goes down, and oil is priced in dollars, then it is
mathematically predictable that the price of oil will rise
accordingly.
That's how commodities work.

Yes, but fuel prices are still WAY different.

Experts figure that around $5-$12/bbl is an "uncertainty premium" due to
Middle East worries. The rest is due to economic growth in Asia, namely
China. This is only going to get worse, until somewhere above $70/bbl
where
we hit a ceiling as shale oil, of which supplies are enormous, becomes
profitable to extract.

The appropriate analogy to the foreign airlines is NOT theUS airlines,
but
AMTRAK.

Agreed, though an important fact is that many foreign airlines enjoy
quasi-monopoly status in certain markets.

Nothing quasi about it; many foreign countires have ONE national airline.

That is one heck of a subsidy.

Not only that, but their taxpayers support the companies as f they were a
national showpiece...ala Amtrak or the Postal Dis-service.

Also, most foreign airlines are primarily international carriers, which is
simply a more profitable market. I suspect that most US airlines turn a
profit on their international routes. One sign of this is that business
class is almost never sold at a discount for tickets originating in the
US.
It's full J-fare or coach.

Yup!!