Oil Price - Jump Prices

[Transmitter 0]

So the oil price has been falling like a heavy bellyflyer with addiotional weights but somehow nothing changed about the jump prices, at least here in europe...

I wonder if someone could shed a light on the relation between falling oil/kerozene prices and jump tickets.

Cheers

[hillson 0]

Transmitter

So the oil price has been falling like a heavy bellyflyer with addiotional weights but somehow nothing changed about the jump prices, at least here in europe...

I wonder if someone could shed a light on the relation between falling oil/kerozene prices and jump tickets.

Cheers

Why should they? It doesn't take that many meatbombs to actually "break even" or "make money" on a single plane turn.

Takes a lot more money to, er, run the place. Gotta pay the manifest ladies, gotta pay the guy that cuts the grass, gotta pay the electricity to keep the lights and heat on, gotta pay rent. Gotta pay the insurance for the thing with the spinny things. Gotta pay a loan and / or a lease on a plane (plus, likely, a "per head tax" to the actual owner). Shit...your P&W needs a new hot section...not cheap. Gotta pay the rigger to make sure your rental gear isn't a deathtrap...gotta buy some new(ish) tandem gear...not cheap.

Wanna get that big turbine in for your boogie...gotta pay that ferry fee plus god knows what else. That extra buck or two they may charge probably won't cover it...

Wanna make a bit more money, maybe? Don't own the DZ...own a fleet of planes.

At the end of the day we spend what amounts to a small amount of money for essentially a wasteful (but fun) activity...almost literally "throwing money out an airplane door."

Jump prices have been pretty flat for quite a bit...while the cost of every single thing has gone up. Everyone howls when the tickey goes up by a buck (imagine if they "normalized" at 5 or 10 bucks more...oof).

We're generally "users" of DZs and not "contributors" in the grand sense...all the fun, less of the asspain. If they get a few extra pennies in the kitty due to favorable gas prices, so be it.

I'm worth more than a tandem over time...but in a single instance, I'm not. etc etc

[normiss 620]

I read a report yesterday that air fares are at a 4 year low.
Why the hell jump prices are at a 10 year high is beyond me.

[diablopilot 2]

normiss

I read a report yesterday that air fares are at a 4 year low.
Why the hell jump prices are at a 10 year high is beyond me.

When you buy 5000 gallons at a time, you don't realize the fluctuations nearly the same way the airlines do at buying a million barrels at a time. Your patronizing a business, not a co-op. This industry is littered with people and abandoned DZ's of people who didn't operate like a business watching a bottom line. If a DZ makes a little more profit when prices are low, and that allows them to upgrade the DZ, repair/maintain the airplane, or simply save it for when times are tight, I'm cool with that.

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You're not as good as you think you are. Seriously.

[CSpenceFLY 1]

Because leading up to the increases most dropzones were way behind needed increases because no one wanted to be the first to raise their rates. I talked to several DZOs who held on till the last minute before beginning to raise the ticket prices. If I remember correctly a $0.50 increase in the cost of fuel should equal $1 increase on the lift ticket. As I remember, most of the DZs held on till the fuel had increased $1.50

Keep in mind, as someone above pointed out, it's not just the fuel that sets the prices. Over a 10 year period, everything costs more to operate. So it can't be expected that the prices jump back to the 2006 price because fuel has taken a short term (in my opinion) drop.

[normiss 620]

I need to go back to an organizer slot.

[Transmitter 0]

I get your points, but keep in mind that the prices have been going down A LOT, I mean according to this source (http://www.indexmundi.com/commodities/?commodity=jet-fuel) the price has been at highest in August 2013 and went down by more than two thirds until today.

That's not just a little drop, I mean that's huge. I have no idea how much percentage of a jump operation is made up by the fuel price.
But I jump on a small non-commercial DZ and in the recent years the main reason for the price going up as we have been told was the fuel. So I'm asking myself why the ticket price doesn't go back down with cheaper fuel since it was the reason to go up in the first place.

Cheers

[CygnusX-1 42]

Quote

main reason for the price going up as we have been told was the fuel.

Because that is what you are told and probably not the only reason. It is just the easy cop out. I tell you that I'm increasing my prices because of fuel and you won't be as quick to shoot me. But if I told you I needed to increase my prices because Jenny the manifest girl wants a raise or because Tom the mechanic wants a second vacation home you might not be as understanding.

But yes I totally agree with you. I think jump prices should track the price of gas and be changed on a weekly basis. All that other stuff is pretty fixed and can be planned for. That way any time I go to the DZ, I won't know what the actual cost of jumping will be. I'll save a few bucks one week and pay a little bit more the next. It will all work out in the end and keep things exciting when the bill comes at the end of the day.

[normiss 620]

Some of my business owner friends had to get used to paying a fuel charge on deliveries awhile back.
Some are changing vendors now based on the ones that refuse to remove the charge now.
Given the Iran situation, I wonder how much longer to the $5 per barrel prices.
Then what?

[dthames 0]

CSpenceFLY

Because leading up to the increases most dropzones were way behind needed increases because no one wanted to be the first to raise their rates. I talked to several DZOs who held on till the last minute before beginning to raise the ticket prices. If I remember correctly a $0.50 increase in the cost of fuel should equal $1 increase on the lift ticket. As I remember, most of the DZs held on till the fuel had increased $1.50

Keep in mind, as someone above pointed out, it's not just the fuel that sets the prices. Over a 10 year period, everything costs more to operate. So it can't be expected that the prices jump back to the 2006 price because fuel has taken a short term (in my opinion) drop.

I have only been jumping for 4 years but I have been happy to see that the ticket prices have stayed very predictable even when the price of fuel goes up and down. I am happy to let the DZ make a few more cents since they didn't demand extra from me when the fuel hit some high points a while back.

Instructor quote, “What's weird is that you're older than my dad!”

[raftman 12]

Quit yer bitchin'! It's costing you LESS to drive to the DZ to jump.

[Transmitter 0]

Seriously guys, read first before you reply. I wasn't bitching, I asked politely about the connection between oil- and ticket prices.
Because I don't understand why the dramatic drop doesn't have any effect when its affecting the general economy pretty heavily.


Cheers

[PixieUK 0]

Transmitter

Seriously guys, read first before you reply. I wasn't bitching, I asked politely about the connection between oil- and ticket prices.
Because I don't understand why the dramatic drop doesn't have any effect when its affecting the general economy pretty heavily.

Cheers

You haven't filled out any of your profile so I have no idea where you jump, but in the UK, many of the DZ's are "tandem factories" for a very good reason - fun jumpers don't make the DZ any money, in fact they usually cost the DZ money!
One of the small DZs where I jump doesn't own a plane, they rent one and it costs around £600 per hour to fly it. That's without the pilot's fees, putting fuel in every 3rd lift, paying the ground crew etc. Since the max number of fun jumpers the plane will hold is 13, at £20 per jump ticket, a full load of fun jumpers doesn't even cover half of the cost of the plane, let alone the extras required to keep it running. And that's without even considering manifest, instructors, rigs for hire, insurance.......
So fuel costs are nowhere near the biggest expense.

For DZs that own their planes, there are hideously expensive maintenance costs including regular servicing after x number of flying hours, insurance, replacement of worn / broken parts etc etc.

So again, fuel is probably a fairly minor consideration in the overall cost of running a DZ. And any time the weather prevents jumping, those planes are not providing any income at all but are still costing money, regardless of whether they are owned or rented and irrespective of needing to put any more fuel into them.

A mind once stretched by a new idea never regains its original dimensions - Oliver Wendell Holmes Jr

[riggerrob 558]

We have heard the same sort of whining from Canadian automobile drivers lately.

First off, the price of gasoline is driven by "how much the market will bear."

Secondly, oil is sold in American dollars on the world market. Lately the Canadian dollar has slumped to around 70 cents on the Canadian dollar.

Thirdly, most Canadian DZs have barely broken even over the last few years. Too many Canadian DZs carry huge loans and have already deferred maintenance several times. We all know what happens when you defer maintenance too long.

[diablopilot 2]

normiss

Some of my business owner friends had to get used to paying a fuel charge on deliveries awhile back.
Some are changing vendors now based on the ones that refuse to remove the charge now.
Given the Iran situation, I wonder how much longer to the $5 per barrel prices.
Then what?

Then you watch DZO liquidate and move out of country.

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You're not as good as you think you are. Seriously.

[Baksteen 84]

Based on the little info I have it sounds to me like that small DZ is operating the wrong plane...
A smaller plane would decrease operating costs and would be easier to fill.

Of course that would mean that smaller formations would be possible, or *gasp* the door might even be on the wrong side of the plane.

But I'm guessing it would depend on how long funjumpers would have to wait for their load.

"That formation-stuff in freefall is just fun and games but with an open parachute it's starting to sound like, you know, an extreme sport."
~mom

[gowlerk 1,903]

Quote

We all know what happens when you defer maintenance too long.

When you defer maintenance too long your AMO will stop giving you technical release on your aircraft. Maintenance schedules are non negotiable. In Canada.

Always remember the brave children who died defending your right to bear arms. Freedom is not free.

[Rstanley0312 0]

normiss

I read a report yesterday that air fares are at a 4 year low.
Why the hell jump prices are at a 10 year high is beyond me.

I think it may have something to do with the cost to maintain. Tandem costs have not really moved that much for a very long time. In fact they have dropped because of dz's embracing groupon etc.

When you look at what the cost of a tandem was 20 years ago and add in inflation.... wow. It may have something to do with it.

Life is all about ass....either you're kicking it, kissing it, working it off, or trying to get a piece of it.
Muff Brother #4382 Dudeist Skydiver #000
www.fundraiseadventure.com

[riggerrob 558]

gowlerk

Quote

We all know what happens when you defer maintenance too long.

When you defer maintenance too long your AMO will stop giving you technical release on your aircraft. Maintenance schedules are non negotiable. In Canada.

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Tee!
Hee!

My dear Gowlerk,
You have such a marvellous sense of humour!
Hah!
Hah!
"Maintenance schedules are non-deferrable in Canada ......"

How dare you quote a different rule book than Transport Canada?

Rules change beyond recognition as you climb up the court system.

The last time (January 2015) we were in court (Superior Court of British Columbia) Crown Counsel (representing Transport Canada) said: "Mr. Dause's maintenance schedule is okay with us."
This statement contradicts a report (Canadian Transportation Safety Board) stating that Mr. Dause forgot to inspect a fuel pump. The pump inspection was detailed in a Special Inspection from the engine manufacturer (Pratt & Whitney). Even more bizarre is that Mr. Dause's AMO had signed off the same inspection on the other fuel pump??????

Meanwhile I am still wondering if Mr. Dause ever paid that $900,000 fine levied by the FAA. The FAA fine was related to skipped inspections of Twin Otter wing spars.
Did anyone hear the outcome of Mr. Dause's disagreement with the FAA????

[Dopamine_Junkie 0]

The way I see it is that is is an opportunity for a DZ owner to make a little more profit, hopefully to put aside for a rainy day or whatever they feel like. It's weird to me how people expect smalll businesses to give them a discount for any number of reasons, yet you don't ask for a discount in WalMart. Small business owners really get crapped on.

The only way I see them dropping prices like the airlines have is to attract new jumpers or get the regulars to buy more jumps. You would need to sell a lot more jump tickets to realize better profits though. January isn't exactly the peak jumping time here, it has been cold and raining off and one for weeks.

[dpreguy 14]

You are talking about the price of raw/crude oil. If you would post the price of 100LL and Jet A, delivered, I would listen. So far I'm not.

Oil has to be refined to gasoline and Jet A, and delivered in over the road little semi tankers to the DZ owner, etc.. If you'd do your homework and generate accurate, "before" and "now" prices. Then I'll listen.

Without that info your post query has little value, as it is based upon an assumption that the price of these two aviation fuels has dropped the same as crude. I don't know the answer to that, and your post implies you don't either. Suggest you come back with the 'delivered fuel' prices info and then post again if you find a significant difference between the "then" and "now. That would make your query valid.

[Dopamine_Junkie 0]

It has. Southwest airlines had a 500 million dollar profit this quarter due to low prices. Isn't Jet-A just kerosene? That costs less to refine than gasoline. I'm not a refinery expert but someone explained to be at one time the difference in all the fuels and how they are refined. Out at DFW airport the fuel comes in to huge underground facilities for storage and then pumped out to the airport right to where the planes are parked. No more need for fuel trucks. DZ operators don't have that convenience for sure and you are right, it costs more to have it delivered by truck in much smaller quantities.

When prices are this low, airlines like Southwest lay out significant money to buy all the fuel they can plus future fuel to be delivered later.

[Transmitter 0]

@dpreguy
Read my second post, click on the link, rethink what you wrote and remember to read and think first next time before you post. thank you.

Thanks for all the helpful answers, I understand the problematic a lot better.

Cheers

[riggerrob 558]

***The way I see it is that is is an opportunity for a DZ owner to make a little more profit, hopefully to put aside for a rainy day or whatever they feel like. It's weird to me how people expect smalll businesses to give them a discount for any number of reasons, yet you don't ask for a discount in WalMart. Small business owners really get crapped on.
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Even weirder is when whuffos chat up an instructor and ask "So can you give me a discount?"
"Not much lady, ' us I don't own the airplane and I don't own the gasoline and I don't own the parachute ....."
"I'm just a poor skydiving bum."

[dpreguy 14]

transmitter:
You can go to your internet commodity price sources all day, but you still haven't researched the delivered price to your dropzone. (Or anyone else's dropzone) Airlines get it by pipeline, dropzones by little tanker trucks sold by petroleum companies. Get off the keyboard and query the DZ owners on what they actually pay for delivered fuel. Then, and only then are your assumptions valid. Fuel is sold by distributors, with a delivery charge. Prices vary. Until you get the actual delivered prices, then and now, you are still operating on an assumption. You may be correct, but until you get off your keyboard and get actual facts - no one will give you credibility. Take your own advice.