Delta Continues to Adjust to Unprecedented Fuel Costs with Addition of Fuel Surcharge
Jun 27, 2008, 12:45 pm
#181
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Maybe they won't have to. What percentage of award tickets get flown as originally booked.? How many people book an award and then later call back to change dates, etc.?
Maybe this new fee (assuming that it also applies to award re-issues) will cause people to hang back and make award travel bookings closer to their dates of travel in order to minimize the chances of having to rebook for some reason.
.
Maybe this new fee (assuming that it also applies to award re-issues) will cause people to hang back and make award travel bookings closer to their dates of travel in order to minimize the chances of having to rebook for some reason.
.
I have my doubts that the majority of award redemption tickets issued involve even a voluntary date change.
Jun 27, 2008, 12:45 pm
#182
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You won't have to pay it twice, though. After 8/15, if you pay it on your original award ticket, you won't need to pay it again on your reissued ticket. (However, you may have to pay the difference if they increase the award fuel surcharge in the interim.)
Jun 27, 2008, 12:49 pm
#183
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For the legal minds out there, how is this situation similar to or different from the energy surcharges the hotel chains tried to sneak past consumers about 10 years ago. I know it wasn't much of a victory (coupons towards the price of a future hotel room), but didn't all of the hotel chains wind up settling class action lawsuits related to this issue?
Jun 27, 2008, 12:53 pm
#184
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Bye bye Delta as my preferred carrier. I'm going to a carrier that doesn't charge these fairs. Why don't you just raise fare prices?
And if they all go that route, bye bye loyalty to any airline.
And if they all go that route, bye bye loyalty to any airline.
Jun 27, 2008, 12:59 pm
#185
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For the legal minds out there, how is this situation similar to or different from the energy surcharges the hotel chains tried to sneak past consumers about 10 years ago. I know it wasn't much of a victory (coupons towards the price of a future hotel room), but didn't all of the hotel chains wind up settling class action lawsuits related to this issue?
Hotels did wind up having to pay wronged consumers as a result of class action litigation.
Edit: .... and there were properties that settled quietly with consumers who never even took the matter to court.
Last edited by GUWonder; Jun 27, 2008 at 1:05 pm
Jun 27, 2008, 12:59 pm
#186
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Unfortunately, the solution is not as simple as, "Let's hedge our fuel today." Hedging fuel is not nearly as easy as it sounds. In terms of jet fuel, heating oil or even crude, the airline would need a counterparty to take the opposite side of the trade. Given the balance sheets that the airlines had, it would have been impossible for any of the legacy carriers to get someone to accept the counterparty risks. If the price of oil had gone down instead of up, the airlines would have needed to add additional collateral to support the prices that they locked in. Without taking anything away from Southwest's success, it would have been impossible for the legacy carriers to match their financial machinations. As for the numerous legacy executives that you cite, I'd be interested in seeing exactly who they are.
Mike
Mike
If that's what I asserted, it would indeed be stupid. But thankfully, it's not.
What many smart airlines have done over the years -- both in the USA and elsewhere -- is convert the variable cost of fuel into a fixed cost upon which additional good business decisions can be based.
Several years ago, more than a couple legacy executives scoffed at Southwest for opting to invest in fuel hedges and other arrangements to fix the airline's fuel requirements at a particular price point (I don't remember the exact price, but it was a point below $100/barrel).
Now while some legacy CEOs try to get legacy employees and legacy frequent-flyers to accept some undesirable "new reality" -- and those CEOs will likely succeed, because any lie or mischaracterization told and printed a thousand times becomes accepted as truth by some -- it's more or less business as usual at Southwest and other carriers who engaged in smarter business practices.
What many smart airlines have done over the years -- both in the USA and elsewhere -- is convert the variable cost of fuel into a fixed cost upon which additional good business decisions can be based.
Several years ago, more than a couple legacy executives scoffed at Southwest for opting to invest in fuel hedges and other arrangements to fix the airline's fuel requirements at a particular price point (I don't remember the exact price, but it was a point below $100/barrel).
Now while some legacy CEOs try to get legacy employees and legacy frequent-flyers to accept some undesirable "new reality" -- and those CEOs will likely succeed, because any lie or mischaracterization told and printed a thousand times becomes accepted as truth by some -- it's more or less business as usual at Southwest and other carriers who engaged in smarter business practices.
Jun 27, 2008, 1:04 pm
#187
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Jun 27, 2008, 1:15 pm
#189
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Unfortunately, the solution is not as simple as, "Let's hedge our fuel today." Hedging fuel is not nearly as easy as it sounds. In terms of jet fuel, heating oil or even crude, the airline would need a counterparty to take the opposite side of the trade. Given the balance sheets that the airlines had, it would have been impossible for any of the legacy carriers to get someone to accept the counterparty risks. If the price of oil had gone down instead of up, the airlines would have needed to add additional collateral to support the prices that they locked in. Without taking anything away from Southwest's success, it would have been impossible for the legacy carriers to match their financial machinations. As for the numerous legacy executives that you cite, I'd be interested in seeing exactly who they are.
Mike
Mike
Jun 27, 2008, 1:39 pm
#191
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Bravo Delta.
Now people are paying $$ for the ability to earn the miles (AMEX)...
And now they will have the opportunity to pay to redeem those miles.
A brilliant strategy.
Now people are paying $$ for the ability to earn the miles (AMEX)...
And now they will have the opportunity to pay to redeem those miles.
A brilliant strategy.
Jun 27, 2008, 1:46 pm
#192
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Deny whatever.
An airline doing that while in or just after bankruptcy is not something I would assert as being "pretty good".
US persons and firms who go through bankruptcy often get credit and counterparty engagements made available to them in a way that would not ordinarily otherwise be coming their way if not for bankruptcy protection.
Originally Posted by sxf24
Second to WN in the US. Pretty good for an airline that was in BK.
US persons and firms who go through bankruptcy often get credit and counterparty engagements made available to them in a way that would not ordinarily otherwise be coming their way if not for bankruptcy protection.
Jun 27, 2008, 1:52 pm
#193
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Airline hedges for fuel have become less effective for substantive reasons far greater than the cracked up argument about crack spread.
Research is all it is cracked up to be ... especially when speaking of oil economics.
Jun 27, 2008, 2:02 pm
#194
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About fuel hedging and the lack of that with Legacy Carriers. Isnt that why we pay millions of $ to executives to make these difficult decisions? If they were not capable of managing the business then they need to be kicked out.
I guess they spend all their time coming up with "special" retention packages that is bankruptcy proof to keep the "talent" in the management group.
I guess they spend all their time coming up with "special" retention packages that is bankruptcy proof to keep the "talent" in the management group.
Jun 27, 2008, 2:04 pm
#195
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On the contrary, that's not it. I suggest understanding the concepts of "how some terms and conditions are not necessarily enforceable in all jurisdictions, with the legal concepts of contra proferentem, and with judicial determinations regarding contracts of adhesion".
Feel free to file suit. Waste of money.