Airlines To Cut Flights, Ground Planes, Raise Fares

Todd Michaels · 04-22-2008, 04:56 PM

As the price of a barrel of crude oil closed today above $119 for the first time ever, airlines are preparing to cut flights, ground planes and likely raise ticket prices.

At Delta…
Richard Anderson, the CEO of Delta Air Lines, said today that domestic airlines need to raise fares by 15 to 20 percent. Anderson said the hike is needed for airlines just to break even due to the rising price of fuel. Last week Delta announced it had agreed to merge with Northwest Airlines.

At United…
UAL Corp.'s United Airlines, the world's second-largest carrier, said it's increasing business- travel fares and ticket-change fees to offset fuel costs. United is requiring Saturday-night stays in about 65 percent of markets it serves, according to a company spokesperson.

Today United reported a $537 million first-quarter loss due to soaring fuel costs and saying it is cutting flights and 1,100 jobs, and pulling 30 jets from service. Shares of UAL stock today plummeted 35 percent to $13.88 in afternoon trading.

Meanwhile, there’s speculation that United would merge with Continental Airlines. However, JPMorgan analyst Jamie Baker reports there may be "considerable merit" to a deal between United and US Airways, which are also said to be exploring a merger.

At Continental…
The stock price dropped 11 percent today.

At JetBlue…
JetBlue Airways Corp. reported a loss today, and is freezing management hiring, studying the sale of its on-board TV unit and considering selling more planes to help blunt record fuel costs. The steps follow a 62 percent jump in fuel expense that eroded gains in first-quarter revenue and passenger traffic.

At American…
AMR, parent company of American Airlines, saw its stock price fall 11 percent today.

At AirTran…
AirTran Holdings Inc. swung to a first-quarter loss due to record fuel costs, it says. The Orlando, Fla.-based airline had a net loss of $34.8 million on $596.4 million in revenue.

At Midwest Airlines…
Midwest Air Group Inc. has to trim its payroll and cut its flight schedule to counteract the rising cost of fuel and ensure its survival, said CEO Tim Hoeksema yesterday.

The company, which operates Midwest Airlines and Midwest Connect, announced last week it will cut 109 jobs. The layoffs, equal to 3.5 percent of Midwest's work force, will come in the next few months and include 35 pilots.

N. Eberhard · 04-22-2008, 05:20 PM

One bit of good news regarding fuel prices is that we will see a lot more refinery capacity become available by this time next year. Even the experts agree that this should help lower oil prices, or at the least keep it more stable. Getting the speculators out of the oil market would help as well. Of course that is partly due to the poor performance of the US dollar.

Oh well. Until (or if?) the issues affecting the price of oil become more stable then those who have to travel by air will have to pony up more cashola.

MarinerOne · 04-22-2008, 07:11 PM

Quote:

Originally Posted by N. Eberhard


	One bit of good news regarding fuel prices is that we will see a lot more refinery capacity become available by this time next year. Even the experts agree that this should help lower oil prices, or at the least keep it more stable.

...

I'll BELIEVE it when I SEE it.

As far as I'm concerned, there is NO way prices of oil/gas will go DOWN. It might stabilize for awhile so that we "feel better", but after we've gotten used to $4/per gallon like we did with $3 per gallon, then it will "magically" go up to $5/gallon, and so on and so forth.

OIL COMPANIES SUCK!!!

L-1011-Heavy · 04-23-2008, 03:53 AM

And You Americans VOTED For Goerge Bush...One Of America's Oil Barons.

Moomins · 04-23-2008, 12:24 PM

Quote:

Originally Posted by L-1011-Heavy


	And You Americans VOTED For Goerge Bush...One Of America's Oil Barons.

So you're implying if a Democrat were in the White House that energy prices would not have risen?

Give me a break Heavy...

It's called supply and demand.

Mystère · 04-23-2008, 03:18 PM

Quote:

Originally Posted by Moomins


	It's called supply and demand.

And you're living in a perfect world.

Why oil suppliers should care to supply more when they could earn as much money by cutting supplies so that prices go up because of constant high demand ? Some would call this "good management"...

Moomins · 04-23-2008, 03:49 PM

Quote:

Originally Posted by Mystère


	And you're living in a perfect world. Why oil suppliers should care to supply more when they could earn as much money by cutting supplies so that prices go up because of constant high demand ? Some would call this "good management"...

I love a good conspiracy...I'd also bet that if France were a member of OPEC and reaping the benefits of high oil prices, that you would be singing a different tune.

lufthansa340 · 04-23-2008, 04:09 PM

There are several reasons for the dramatic increase of gas/oil prices...

1.) Market speculation... is adding approximately 20%-30% onto the price. Due to the fact that the Fed has cut interests rates, the dollar has become devalued and investors are looking into commodities as a substitute. Once the interest rates are no longer being slashed nd are raised (once the credit crisis is effectively over) watch for the dollar to rebound and the oil bubble to pop... a little.

2.) Refinery production... operating below the peak capacity that is needed at this time of the year.

3.) Supply difficulties... tensions in the Middle East and Africa have raised fears of attacks on vital pipelines of oil.

4.) Reactionary investors... an oil tanker gets attacked by pirates off the Arabian Peninsula and oil jumps $2 a barrel. Was that jump warranted? No. Weekly accounts of oil and gas reserves come in a little low and oil jumps $3 a barrel. Was that jump warranted? No.

5.) Developing markets... Russia, China and India are consuming record amounts of crude oil... supply and demand. Price goes up.

6.) OPEC... it is their right to release and supply as much or as little as they want.

L-1011-Heavy · 04-24-2008, 03:55 AM

Quote:

Originally Posted by lufthansa340


	There are several reasons for the dramatic increase of gas/oil prices... 1.) Market speculation... is adding approximately 20%-30% onto the price. Due to the fact that the Fed has cut interests rates, the dollar has become devalued and investors are looking into commodities as a substitute. Once the interest rates are no longer being slashed nd are raised (once the credit crisis is effectively over) watch for the dollar to rebound and the oil bubble to pop... a little. 2.) Refinery production... operating below the peak capacity that is needed at this time of the year. 3.) Supply difficulties... tensions in the Middle East and Africa have raised fears of attacks on vital pipelines of oil. 4.) Reactionary investors... an oil tanker gets attacked by pirates off the Arabian Peninsula and oil jumps $2 a barrel. Was that jump warranted? No. Weekly accounts of oil and gas reserves come in a little low and oil jumps $3 a barrel. Was that jump warranted? No. 5.) Developing markets... Russia, China and India are consuming record amounts of crude oil... supply and demand. Price goes up. 6.) OPEC... it is their right to release and supply as much or as little as they want.

Funny Thing Is, America Doesn't Get Oil From The Middle East, But Canada, South America & The Gulf Of Mexico.
Mostly From Canada.

L-1011-Heavy · 04-24-2008, 03:58 AM

Quote:

Originally Posted by Moomins


	So you're implying if a Democrat were in the White House that energy prices would not have risen? Give me a break Heavy... It's called supply and demand.

Artificially REDUCED Production To Artificially Inflate Prices.
What's Going On Here Is No Different That The Oil Crisis In The 1970s.
C'mon, Oil Companies Are Making RECORD Profits To The Tune Of Billions.
Conspiracy? Not Really. Simple Greed.

lufthansa340 · 04-24-2008, 04:55 PM

Quote:

Originally Posted by L-1011-Heavy


	Funny Thing Is, America Doesn't Get Oil From The Middle East, But Canada, South America & The Gulf Of Mexico. Mostly From Canada.

True that most of the oil comes from Canada and Mexico but Saudi Arabia is the number three producer of oil bound for the U.S. and Iraq is still in the top ten and they're both in the Middle East. Also it needs to be understood that despite the fact that Canada and Mexico provide much of the U.S.'s oil any disruption of oil production globally has a huge impact on all other markets.

N. Eberhard · 04-24-2008, 05:15 PM

LU340 is doing a good job of presenting some of the issues of the current world oil issues. Of course there are more, but any influence that President Bush has is way down the list.

corby78 · 04-24-2008, 06:25 PM

Quote:

Originally Posted by N. Eberhard


	LU340 is doing a good job of presenting some of the issues of the current world oil issues. Of course there are more, but any influence that President Bush has is way down the list.

This is exactly right, people who hate Bush are just using gas prices as another log on their fire. Seriously, the President of the United States cannot create massive huricanes, influence crazy people to crash into buildings, and certianly not change the amount THE WORLD pays for a barrel of oil. There are so many factors throughout the world that come into play.

Moomins · 04-24-2008, 09:50 PM

Quote:

Originally Posted by N. Eberhard


	LU340 is doing a good job of presenting some of the issues of the current world oil issues. Of course there are more, but any influence that President Bush has is way down the list.

I 100% agree.

Moomins · 04-24-2008, 09:53 PM

Quote:

Originally Posted by L-1011-Heavy


	Artificially REDUCED Production To Artificially Inflate Prices. What's Going On Here Is No Different That The Oil Crisis In The 1970s. C'mon, Oil Companies Are Making RECORD Profits To The Tune Of Billions. Conspiracy? Not Really. Simple Greed.

OPEC sets production quota's Heavy, not President Bush.

A Tupolev · 04-24-2008, 10:17 PM

Quote:

Originally Posted by L-1011-Heavy


	And You Americans VOTED For Goerge Bush...One Of America's Oil Barons.

Hey Heavy, how are you doing. We have not talked in a while.

In what way is GW an "oil baron"?

SANNY-LAX · 04-25-2008, 07:25 PM

Quote:

Originally Posted by N. Eberhard


	One bit of good news regarding fuel prices is that we will see a lot more refinery capacity become available by this time next year. Even the experts agree that this should help lower oil prices, or at the least keep it more stable. Getting the speculators out of the oil market would help as well. Of course that is partly due to the poor performance of the US dollar. Oh well. Until (or if?) the issues affecting the price of oil become more stable then those who have to travel by air will have to pony up more cashola.

More refinery ? you gotta be kidding

when oil companies want to built more refineries every body says not in my back yard (Pollution)

This is what happened

pay $4.00 $5.00 $6.00 or even more for gallon of gas and see what happen.

04-22-2008, 04:56 PM	#1
Todd Michaels Collector Join Date: Nov 2007 Location: Los Angeles Posts: 77 Country:	Airlines To Cut Flights, Ground Planes, Raise Fares As the price of a barrel of crude oil closed today above $119 for the first time ever, airlines are preparing to cut flights, ground planes and likely raise ticket prices. At Delta… Richard Anderson, the CEO of Delta Air Lines, said today that domestic airlines need to raise fares by 15 to 20 percent. Anderson said the hike is needed for airlines just to break even due to the rising price of fuel. Last week Delta announced it had agreed to merge with Northwest Airlines. At United… UAL Corp.'s United Airlines, the world's second-largest carrier, said it's increasing business- travel fares and ticket-change fees to offset fuel costs. United is requiring Saturday-night stays in about 65 percent of markets it serves, according to a company spokesperson. Today United reported a $537 million first-quarter loss due to soaring fuel costs and saying it is cutting flights and 1,100 jobs, and pulling 30 jets from service. Shares of UAL stock today plummeted 35 percent to $13.88 in afternoon trading. Meanwhile, there’s speculation that United would merge with Continental Airlines. However, JPMorgan analyst Jamie Baker reports there may be "considerable merit" to a deal between United and US Airways, which are also said to be exploring a merger. At Continental… The stock price dropped 11 percent today. At JetBlue… JetBlue Airways Corp. reported a loss today, and is freezing management hiring, studying the sale of its on-board TV unit and considering selling more planes to help blunt record fuel costs. The steps follow a 62 percent jump in fuel expense that eroded gains in first-quarter revenue and passenger traffic. At American… AMR, parent company of American Airlines, saw its stock price fall 11 percent today. At AirTran… AirTran Holdings Inc. swung to a first-quarter loss due to record fuel costs, it says. The Orlando, Fla.-based airline had a net loss of $34.8 million on $596.4 million in revenue. At Midwest Airlines… Midwest Air Group Inc. has to trim its payroll and cut its flight schedule to counteract the rising cost of fuel and ensure its survival, said CEO Tim Hoeksema yesterday. The company, which operates Midwest Airlines and Midwest Connect, announced last week it will cut 109 jobs. The layoffs, equal to 3.5 percent of Midwest's work force, will come in the next few months and include 35 pilots.

04-22-2008, 05:20 PM	#2
N. Eberhard Dr. Diecast I presume? Join Date: Jul 2000 Location: Port Orchard, WA Age: 44 Posts: 3,166 Country:	Re: Airlines To Cut Flights, Ground Planes, Raise Fares One bit of good news regarding fuel prices is that we will see a lot more refinery capacity become available by this time next year. Even the experts agree that this should help lower oil prices, or at the least keep it more stable. Getting the speculators out of the oil market would help as well. Of course that is partly due to the poor performance of the US dollar. Oh well. Until (or if?) the issues affecting the price of oil become more stable then those who have to travel by air will have to pony up more cashola.

04-23-2008, 03:53 AM	#4
L-1011-Heavy The Heavy One Join Date: Feb 2005 Location: Toronto, Canada, Eh? Trijets & Landors 4 EVER Age: 45 Posts: 4,245 Country:	Re: Airlines To Cut Flights, Ground Planes, Raise Fares And You Americans VOTED For Goerge Bush...One Of America's Oil Barons.

04-23-2008, 04:09 PM	#8
lufthansa340 Supreme Overlord Join Date: Apr 2007 Location: ny Age: 24 Posts: 169 Country:	Re: Airlines To Cut Flights, Ground Planes, Raise Fares There are several reasons for the dramatic increase of gas/oil prices... 1.) Market speculation... is adding approximately 20%-30% onto the price. Due to the fact that the Fed has cut interests rates, the dollar has become devalued and investors are looking into commodities as a substitute. Once the interest rates are no longer being slashed nd are raised (once the credit crisis is effectively over) watch for the dollar to rebound and the oil bubble to pop... a little. 2.) Refinery production... operating below the peak capacity that is needed at this time of the year. 3.) Supply difficulties... tensions in the Middle East and Africa have raised fears of attacks on vital pipelines of oil. 4.) Reactionary investors... an oil tanker gets attacked by pirates off the Arabian Peninsula and oil jumps $2 a barrel. Was that jump warranted? No. Weekly accounts of oil and gas reserves come in a little low and oil jumps $3 a barrel. Was that jump warranted? No. 5.) Developing markets... Russia, China and India are consuming record amounts of crude oil... supply and demand. Price goes up. 6.) OPEC... it is their right to release and supply as much or as little as they want.

04-24-2008, 05:15 PM	#12
N. Eberhard Dr. Diecast I presume? Join Date: Jul 2000 Location: Port Orchard, WA Age: 44 Posts: 3,166 Country:	Re: Airlines To Cut Flights, Ground Planes, Raise Fares LU340 is doing a good job of presenting some of the issues of the current world oil issues. Of course there are more, but any influence that President Bush has is way down the list.