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Online Airline Management Simulation
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Author Topic: Fuel Prices  (Read 1024 times)

minerva

  • Former member
Fuel Prices
« on: March 22, 2012, 05:18:52 PM »
Anyone else find it refreshing that fuel prices in this scenario aren't constantly depressed below $40 until the mid 60s as per usual? 
Experienced players often complain about how easy it is to make money in the JA scenarios, but if fuel keeps rising steadily, I think this will be far more challenging than usual...a good thing.

Offline Jona L.

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Re: Fuel Prices
« Reply #1 on: March 22, 2012, 06:52:44 PM »
Anyone else find it refreshing that fuel prices in this scenario aren't constantly depressed below $40 until the mid 60s as per usual? 
Experienced players often complain about how easy it is to make money in the JA scenarios, but if fuel keeps rising steadily, I think this will be far more challenging than usual...a good thing.

Well, according to a fuel stresstest I made a couple of days ago my break even fuel price is way over the $500 --> go ahead, fuel, RISE ;D ;D

Offline Teemu

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Re: Fuel Prices
« Reply #2 on: March 23, 2012, 10:18:25 AM »
I think this will be far more challenging than usual...a good thing.

Start next time some place remote and figure out how to make money in there. I found it more challenging than starting in a big city...

minerva

  • Former member
Re: Fuel Prices
« Reply #3 on: March 24, 2012, 02:18:52 AM »
Ah, but I've done that in several games -- been playing consistently for over 2 years.  First time starting in Tokyo though.

minerva

  • Former member
Re: Fuel Prices
« Reply #4 on: March 24, 2012, 02:20:58 AM »
And, fuel isn't rising anymore, so my initial post is moot -- unfortunately.

highlander1715

  • Former member
Re: Fuel Prices - New Fuel Hedging tool
« Reply #5 on: April 23, 2012, 04:41:50 PM »
I take it the new fuel hedging option will only be available in scenarios in which it was a historical factor? 

Offline Sami

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    • AirwaySim - Are you the next Richard Branson?
Re: Fuel Prices
« Reply #6 on: April 23, 2012, 05:02:23 PM »
In all scenarios. It would not make much sense if you know what fuel price will do.......

highlander1715

  • Former member
Re: Fuel Prices
« Reply #7 on: April 23, 2012, 06:37:04 PM »
In all scenarios. It would not make much sense if you know what fuel price will do.......

I don't think I expressed myself clearly, what I meant was that I presumed that the taking of a hedge position on jet fuel price futures would only be active in scenarios when airlines were actually doing it, typically from the mid 80s (I believe still trying to research that) obviously the biggest exponent was Southwest Airlines who saved $3.5Bn between 1998 and 2009 using that tool.  And that it would not feature in scenarios when it was not common practice or in some cases legal to speculate in such a manner, nor should it be available to airlines based in countries with "command" economies and no facility to speculate exists.

minerva

  • Former member
Re: Fuel Prices
« Reply #8 on: April 23, 2012, 07:02:40 PM »
While it would be nice if this feature, and others, were more historically accurate, it doesn't make much sense to apply that criteria to one feature alone and not to related others. For instance, you mention 'command' economies: right now airlines based in such economies are paying world market rates for their fuel. The fuel-guzzling Soviet era aircraft are at a huge disadvantage in the sim when the world price rises because their fuel is not subsidized in the sim like it was historically. And you can buy western aircraft for the old eastern bloc countries (unlike what was historically the case) which effectively compensate for that. So, if (for programming and playability reasons) there is just one fuel market mechanism across time in the sim (not an accurate reflection of historical reality) then it makes sense to allow the hedging universally too.

highlander1715

  • Former member
Re: Fuel Prices
« Reply #9 on: April 23, 2012, 08:29:36 PM »
If we continue to dilute the historical reference points never mind the accuracy where will it end?  There has to be a line in the sand beyond which the game ceases to be a "simulation" of events and becomes just another (albeit very good) game.   Just because we are "fudging" one aspect of historical fuel markets that is not an excuse to fudge another.

Surely it is possible to switch this mechanism on an off between scenarios in the same way for example that basing is controlled to reflect the historical ability of Eurozone airlines to base in EU countries only after a certain date?

I would be happier with this if it was part of a larger restructuring to include shareholding, and other stock market practices.

I also believe that this will once again provide another enormous advantage to our biggest airlines (as if they did not have enough already) as the cash rich players will now be able to game the fuel market as well on top of the aircraft supply market etc etc.

Offline Sami

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    • AirwaySim - Are you the next Richard Branson?
Re: Fuel Prices
« Reply #10 on: April 23, 2012, 08:44:11 PM »
The feature will be available in all game eras, but usually it's more usable in the 1980s+ scenarios since the fuel prices fluctuate more there. (it would be a bit pointless to enable it always at a predefined year, and what that year would even be....)

And the feature is available and fully usable to each and every airline (not just for the "big ones"), so I cannot believe even this is turned into a bad thing now.  ::)

Offline dmoose42

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Re: Fuel Prices
« Reply #11 on: April 24, 2012, 01:55:00 AM »
Oh sami, never doubt our ability to see the downside in things.  It's what makes us special  ;D

I do think there's a substantial difference in functional replayability of the simulation vs. the picture perfect replication of reality.  The forums have enumerated this 5000 different ways.  To me commonality, frequency, etc are much bigger issues, and of the more esoteric ones, the runway issue (having runways reflect todayish lengths rather than the lengths during the period) is a bigger issue as it weakens certain aircraft designed for certain regions/capabilities. 

Having the ability to hedge fuel prices earlier than in real life seems like a good idea simply because fuel prices are not simply a replica of the historical price series - as a result, the ability to hedge that risk seems perfectly reasonable to me - and I think the way hedging has been implemented is a good first step.  (as an aside, if we are going to be technically accurate, doesn't the simulation have to consider the counterparty risk of the financial institution providing the hedge???? - obviously we would not include that in the simulation (right?!?!))

moral of the story - this is a good addition to the sim.


 

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