X-Message-Number: 26912
From: "Mark Plus" <>
Subject: What part of "jet fuel shortage" don't you understand?
Date: Thu, 01 Sep 2005 22:59:53 -0700

Imagine what will happen to long-distance commercial jet travel when the oil 
supply collapses in a few years, like the double-digit declines we've seen 
in the North Sea. I haven't found any reports yet of cancelled flights to 
the U.S. because of concerns about not getting the fuel for the return trip.

Mark Plus



http://www.businessweek.com/ap/financialnews/D8CBMA000.htm?campaign_id=apn_home_down&chan=db

The Associated Press/ATLANTA
By HARRY R. WEBER
AP Business Writer

Airlines may face possible fuel shortages

SEP. 1 4:31 P.M. ET Airline stocks continued to slide Thursday amid jet fuel 
prices that have risen nearly 20 percent this week following Hurricane 
Katrina's devastation, which prompted at least two major carriers to raise 
fares.

A Standard & Poor's analyst, meanwhile, said the added financial pressure on 
Delta Air Lines Inc., the nation's third-largest carrier, "may hasten an 
already likely bankruptcy filing, which will probably occur within weeks."

Jet fuel prices have risen in the last week an average of 36 cents, from 
$1.91 a gallon on Aug. 23 to $2.27 a gallon on Tuesday, according to Jack 
Evans of the Air Transport Association. He didn't have updated figures 
Thursday.

The increase, blamed in part on refinery outages and other damage along the 
Gulf Coast because of the hurricane, means an extra $18.6 million per day in 
fuel cost for the airlines based on an average daily industry consumption of 
52 million gallons of jet fuel.



http://www.forbes.com/business/services/2005/09/01/katrina-airlines-fuel-cz_mt_pb_0901airlines.html

Will Katrina Ground Airlines For Good?
Mark Tatge and Phyllis Berman, 09.01.05, 5:55 PM ET

CHICAGO - Add U.S. airlines to the casualty list in Hurricane Katrina's 
wake.

Expect more Chapter 11 bankruptcies followed by mergers among the industry's 
top players. Topping the list are two familiar names: Delta Air Lines (nyse: 
DAL - news - people ) and Northwest Airlines (nasdaq: NWAC - news - people 
).

Skyrocketing jet fuel prices, which have already cost the airlines an 
additional $9 billion since 2003, will only accelerate industry 
consolidation if oil prices stay above $70 per barrel, as is widely 
expected. Jet fuel prices are running $2.32 per gallon on the East Coast. 
And while that may seem cheap compared with a gallon of gas, jet fuel prices 
have more than tripled since the mid-1990s.

Jet fuel now accounts for 27% to 30% of operating costs and exceeds labor 
costs at some airlines.

Flight cancellations and service disruptions related to the hurricane are 
going to cost the airlines revenue. And it couldn't come at a worse 
time--just before Labor Day, marking the start of the seasonal traffic 
slowdown. As traffic tapers off, airlines will have less cash to pay those 
big fuel bills.

Watch for major airlines to press the U.S. government for emergency relief 
or an exemption from antitrust, so they can consolidate.

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