many airlines now pay up front for fuel

[BigWill]

The Link

 

[Gardner Barnes]

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[Bernard]

It just a matter of credit risk. Right now airlines credit ratings are weak. Thirty days worth of jet fuel can be a huge chunk of change. Oil companies don't want to have to line up in bankruptcy court to try to get their money. Despite their huge profits, selling refined fuel is a low margin business. You can't afford to ship that much product and not get paid.

Oil companies aren't the only ones tightening the screws. Visa and Mastercard just changed their policy for one airline (Frontier? Other?). Now they are holding onto ticket buyers cash for a longer period of time. When airline credit was better, they'd send your payment straight to the airline's account as soon as you bought your ticket, even though your flight might not take off for weeks or months. Now they are waiting longer. The bank don't want to be on the hook for refund to customers if the airline folds and flight never take place.

Bernard

 

[zzzz]

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[BigWill]

on one hand, good for SWA. On the other, all this speculative ******** is partly to blame for the smooth buttfucking that joe lunchmeat is taking at the pump these days.

 

[Gardner Barnes]

It is not SWA hedges that are driving up the price of oil - if anything, they are keeping the price in check. Blame commidites indexers like pension funds and endowments chasing the Harvard strategy shift that started in the early part of this decade.

Read these EXCELLENT blog posts for a great summary on commodities speculation:Quantifying Commodities Speculation

Commodities Speculation Symptom Of Larger Problem