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Online Airline Management Simulation
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Author Topic: Fuel Price  (Read 692 times)

Offline John

  • Members
  • Posts: 18
Fuel Price
« on: October 07, 2014, 03:34:51 PM »
I was looking at the past post and found no one answering this question!
What the hell! fuel price is flying higher that my planes not that long ago we were looking at $160 i was spending approx $360k per week. Now i am up to $850k per week on gas with the same number of planes in the air.  :o
Anyone got an idea how long before the fuel price will stay high or is the the way it is now?
I have had a look at the data and its all down to fuel prices that is killing me fast.

chris.abrams67

  • Former member
Re: Fuel Price
« Reply #1 on: October 07, 2014, 05:09:20 PM »
Hi John

If you look at Office -->Fuel Management you can see what your staff are forecasting. My buffoons are saying that it's going to be between $212-254 by the end of the year. But they're not called "buffoons" for nothing. ::)

In the meantime action you could take -

1) Cancel any loss making flights. I know the general view is the a/craft can't make money on the ground, but if it loses money because of fuel burn then it's cheaper on the ground. So cut the loss makers straight away.
2) Get the fleet numbers down below your current 4.
3) 44% load factor doesn't look too good, perhaps some of your routes are just too heavily competed or you've got too big aircraft on?
4) Have you reset your prices recently? That could be good for a few percentage points increase in revenue (although I'm advised that high fuel prices don't count towards inflation in the AWS universe.)


brique

  • Former member
Re: Fuel Price
« Reply #2 on: October 07, 2014, 05:35:48 PM »
Whilst fuel may be cheap for a while on occasion, in the AWS world, it will always get more expensive over the years : insanely so at times : games have seen a $1k gas price before and will again : and so it becomes ever more important,  as the years pass, to ensure your birds dont burn more in fuel than your pax pay you to travel. The one sure path to BK is to assume next years revenue and costs will be the same as this years : they wont be and any change will almost certainly not be in your favour. At the start of a game world, the priority is to build up your airline, its routes and infrastructure and cheap gas allows that : but it dont last and sooner or later, you got to bite that bullet and plan for an airline and fleets that can survive a high-gas-cost environment, even if it means dropping marginal routes and trimming back your overall numbers.

Offline John

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  • Posts: 18
Re: Fuel Price
« Reply #3 on: October 07, 2014, 11:19:55 PM »
Thanks for the input guys, i have already taken some actions and have started to see 'Green' grass growing. Cross fingers.

bergquist77

  • Former member
Re: Fuel Price
« Reply #4 on: October 10, 2014, 08:20:03 PM »
Actually, this time the "buffoons" had a pretty good idea! This fuel price boom was predicted well in advance. Gotta be pretty happy with this fuel hedge contract! It ended with pretty good timing too it seems :)


Offline Sami

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    • AirwaySim - Are you the next Richard Branson?
Re: Fuel Price
« Reply #5 on: October 10, 2014, 10:58:34 PM »
Another game and another forum, but useful advice:

http://www.airwaysim.com/forum/index.php/topic,52485.msg299757.html#msg299757

Fuel hedging is not gambling and if you are hedging fuel to "beat the market" you aren't doing it right.

The purpose of hedging fuel is to lock in pricing so you know what price you will be paying in the coming months.  It is a management tool.  If you can lock in the price at $260 for a year, then you know you will be paying $260 and can reliably spend money on new aircraft, routes, etc. knowing that you won't be paying $350 instead.  Without the hedge, the level of uncertainty is increased and you have to be a little more cautious in your decision-making.  Fuel could go down or it could go up, but even if it goes down you have to plan for it going up unless you are hedged.


..but it's much more fun to gamble though ;)

Offline Troxartas86

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  • Posts: 877
Re: Fuel Price
« Reply #6 on: October 13, 2014, 04:02:30 AM »
I don't always hedge because I do see it as a gamble and one you'll often lose. You're always locking in a slightly higher price than whatever the current market is so when you hedge and the price doesn't go up, you are spending more than you need to. Of course this extra expense can also be seen as something of an insurance premium. That's what I consider my current hedge to be, protection against another big spike, since my staff seems to think it is very likely to happen.

I'm making big bucks now keeping the adjustments I made to survive the last spike in place and I'd like to keep it that way through the impending disaster that will be the collapse of the USSR.

chris.abrams67

  • Former member

The person who likes this post:
Re: Fuel Price
« Reply #7 on: October 13, 2014, 11:18:27 AM »
....through the impending disaster that will be the collapse of the USSR.

It'll never happen. ???

Offline Troxartas86

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Re: Fuel Price
« Reply #8 on: October 13, 2014, 12:20:54 PM »
It'll never happen. ???

They said that about Bulgaria but now look, they changed their flag! Their flag, man! Red stars are dropping like flies. The end is nigh!  :'(

chris.abrams67

  • Former member
Re: Fuel Price
« Reply #9 on: October 13, 2014, 01:23:39 PM »
Pssst...word is that there's a young lad who's become bit of a "go to" guy in the KGB called Putin. He'll sort them out  ;).



chris.abrams67

  • Former member
Re: Fuel Price
« Reply #10 on: October 13, 2014, 05:27:19 PM »
Hmm. Ukraine and Estonia gone now  :o, you could be right  ::).

 

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