Airline Fuel question

Delta announced today it will lose another 1 Billion dollars in 2005

Most of the US Airlines are losing money due to higher fuel cost's

In Europe, airlines are making money and the fuel is 3 times more expensive.

I don't get it.

Is it some new type of math the US airlines are using or have they
become bloated Politically Correct business model disasters due to PC
hiring practices and employee perks?

Or are they looking for a tax payer bailout for their inefficient
business operations?

Just curious

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.

Apart from Greenspan, we have mental midgets running economic policy in
the US right now.

Peterpan wrote:
Delta announced today it will lose another 1 Billion dollars in 2005

Most of the US Airlines are losing money due to higher fuel cost's

In Europe, airlines are making money and the fuel is 3 times more
expensive.

I don't get it.

Is it some new type of math the US airlines are using or have they
become bloated Politically Correct business model disasters due to PC
hiring practices and employee perks?

Or are they looking for a tax payer bailout for their inefficient
business operations?

Most European countries have heavy taxes on petrol. The cost of the
actual product is less than in the US. My guess is that the EU wants to
encourage airline business and provides some tax breaks.

On Wed, 23 Mar 2005 13:25:46 -0500, Peterpan
wrote:

Delta announced today it will lose another 1 Billion dollars in 2005

Most of the US Airlines are losing money due to higher fuel cost's

In Europe, airlines are making money and the fuel is 3 times more expensive.

What does a ticket cost on BA or similar? Perhaps the price is
higher, and hence helps their ability to make profit?

Southwest makes a profit here in the states, so it certainly is
possible.

"William W. Plummer" wrote in message
...
Peterpan wrote:
Delta announced today it will lose another 1 Billion dollars in 2005

Most of the US Airlines are losing money due to higher fuel cost's

In Europe, airlines are making money and the fuel is 3 times more
expensive.

I don't get it.

Is it some new type of math the US airlines are using or have they become
bloated Politically Correct business model disasters due to PC hiring
practices and employee perks?

Or are they looking for a tax payer bailout for their inefficient
business operations?

Most European countries have heavy taxes on petrol. The cost of the
actual product is less than in the US. My guess is that the EU wants to
encourage airline business and provides some tax breaks.

The tax on jet fuel is the same in Europe as it is in the US. The price of
jet fuel in the Uk is about £0.40 /litre as opposed to AVGAS which is £1.20
a litre. Its one of the reasons why diesel engines are of interest in
Europe.

In their last report BA said they expected that the would have additional
fuel costs of £300 m despite the fact that the dollar is at banana republic
values. all the gains from having one of their biggest costs priced in
dollars has been wiped out by the increase in fuel.

Not withstanding that they expect to post profits this year of about $1bn
and with no government handouts, loan guarantees, etc etc.

"Nathan Young" wrote in message
...
On Wed, 23 Mar 2005 13:25:46 -0500, Peterpan
wrote:

Delta announced today it will lose another 1 Billion dollars in 2005

Most of the US Airlines are losing money due to higher fuel cost's

In Europe, airlines are making money and the fuel is 3 times more
expensive.

What does a ticket cost on BA or similar? Perhaps the price is
higher, and hence helps their ability to make profit?

How many of those airlines received massive subsidies since they are state
owned, not private firms?

Southwest makes a profit here in the states, so it certainly is
possible.

Yup...the highest total return to investors of the past 30 years.

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.

"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.

I'm thoroughly ****ed off about the current US fiscal situation but IMHO
many people--not the least of them being Warren Buffett--are missing the
forest for the trees. Over the long term, Europe faces structural economic
challenges that make our own situation look positively carefree by
comparison. Their debt loads are worse than ours and their growth rates are
significantly lower. Not to mention their population is graying faster than
Florida's. IMHO what we're seeing right now is one part truth and one part
wishful thinking on the part of the anti-Bush, anti-US crowd. Corrections in
currency markets can come at frightening speeds and I suspect this one will
make a few unemotional investors very wealthy (c.f. Soros' bet against the
Bank of England) and leave a lot more crying into their Pellegrino (c.f.
Soros' bet on JF Kerry).

-cwk.

"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.