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Old June 14th, 2008, 09:59 AM
AR AR is offline
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Admiral
 
Join Date: Sep 2005
Posts: 2,481
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Venice--

I guess I just thought it was a turboprop because it's pretty peppy. Looks like you're good to go!

Phil & Liz

A couple comments about hedging fuel. . .

1. Anybody who's right about any commodoties play looks like a genius in retrospect. It's easy (and tempting) to say that any idiot should have known a year ago that what's happened to fuel prices was inevitable, but back then it wasn't so obvious. Fuel had already run up a lot, and it wasn't a sure thing that it would go through the roof the way it has. Southwest bet big and guessed right. Good for them, but it wasn't the no-brainer that it seems like now. If they'd guessed wrong they'd be paying more than everybody else and would look like idiots.

2. You need something very specific to do a deal like that--lots of cash. Southwest is and has been cash rich because their original business plan was brilliant and worked well. The legacy airlines, on the other hand, are still paying for the poor management of the 80's and 90's in ways that have prevented them from generating much in the way of cash to spend on things like arbitraged fuel. Southwest should continue to do well, as long as they don't screw up their labor relations. That will be a challenge for them in the intermediate term.
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