0
rmsmith

Anyone watching Jet-A prices?

Recommended Posts

I see news stories about consumer motor fuel, but nothing about commercial transportation yet. I would imagine that our DZO(s) will have to raise their prices this summer as rising energy costs are forcing everything to cost more. Hell, even my worn out Toyota (refused by wrecking yards) Tercel with 300k+ miles cost $27.65 to fill up the other day! Anyway, think we'll see $25 to 12,500 this year?

Share this post


Link to post
Share on other sites
http://www.globalair.com/fbo/aviationfuel.asp

Remember guys a $1.00 increase in turbine fuel equals a $1.00 in jump prices if a DZO is going to breakeven on the price change.

Roughly, an Otter burns 20-30 US gallons per load and there are 20-23 maximum jumpers in an Otter.

If fuel prices go up less than a dollar, but jump prices increase by $1 me thinks the dzo is taking advantage of his jumpers.

Blue skies,

Jim

Share this post


Link to post
Share on other sites
Quote

Remember guys a $1.00 increase in turbine fuel equals a $1.00 in jump prices if a DZO is going to breakeven on the price change.

Roughly, an Otter burns 20-30 US gallons per load and there are 20-23 maximum jumpers in an Otter.

If fuel prices go up less than a dollar, but jump prices increase by $1 me thinks the dzo is taking advantage of his jumpers.



Isn't 30 US gallons divided by 23 jumpers 1.304 gallons per jumper? :P

And doesn't that mean that any per-gallon fuel price increase between $0.766 and $1.000 (exclusive) should be able to result in a break-even price increase of more than $1.00 per load? [:P, again]

-=-=-=-=-
Pull.

Share this post


Link to post
Share on other sites
I was using rule of thumb that people could remember. It only matters exactly when you are figuring profit and loss.

Do you really care if the exact cost increase is 76.667 or 1.30 if the jump ticket price went up $2? Your cost just increased by $2. That was my point.

Blue skies,

Jim

Share this post


Link to post
Share on other sites
Quote

Quote

Anyway, think we'll see $25 to 12,500 this year?




... yep, I know a DZ that's already charging that.


Anyone know what Elsinore and Perris are charging for 12,500???


Perris is $22 or $23 for credit.
I really don't know what I'm talking about.

Share this post


Link to post
Share on other sites
Quote

Quote

So, if fuel prices take a nose dive, will jump tickets do the same?



Zipp0



Nope, first the DZO will need to recover the loss in PROFIT from when gas prices spiked, second best to bulid a bit for when they spike again... and they WILL spike again... third when have you EVER seen a price DROP in a nitch market? and of course 4th fuel prices will NEVER drop again not for dino based fuel in a world with an exploding population, especially when that population is focused in nations currently working on "modernization" like china and India



Edited to actually include a reply

Good Judgment comes from experience...a lot of experience comes from bad
judgment.

Share this post


Link to post
Share on other sites
Quote

i can't wait till we can run cars on water



WAY WAY WAY OFF TOPIC HERE ... BUT

cars will NEVER run on water, water is NOT an energy source, if you are talking about hydrogen you are fooling yourself Hydrogen is also NOT an energy source. Hydrogen can run an engine (again water cannot) however hydrogen has to be produced and collected, it cannot be grown in a field nor can it be dug out of the ground. Hydrogen cars are like electric the power has to come from somewhere.

Good Judgment comes from experience...a lot of experience comes from bad
judgment.

Share this post


Link to post
Share on other sites
Quote

and of course 4th fuel prices will NEVER drop again not for dino based fuel in a world with an exploding population,



Oh, I've heard that before.

Prices are not currently based on reality, as supply is actually good. Our gasoline reserves are up over last year in the USA. Current prices are not tied to supply and demand, but rather on the futures markets and speculation. Want proof? Look at the mild winter and then look at heating oil prices. NUTS.

Prices will drop one reality enters the equation.

Zipp0

--------------------------
Chuck Norris doesn't do push-ups, he pushes the Earth down.

Share this post


Link to post
Share on other sites
prices WILL drop once we get smart and start driving more
effiecient cars. Think about why ppl in europe pay $7 per
gallon, the petro co's know that they drive those little lawn
mowers that get 40 or 50 miles per gallon. We are still driving those huge suv V-8's. The equation is relative &
simple.... if we do what the europeans do the petro co's
will raise the price. $7/gal at 40 mpg = $3/gal at 20 mpg.
We are victims on both sides of the coin.

please kiss me

Share this post


Link to post
Share on other sites
Quote

Do you really care if the exact cost increase is 76.667 or 1.30 if the jump ticket price went up $2? Your cost just increased by $2. That was my point.

Not meant as a flame but if the cost did go up $1.30 do you really think it unfair for the DZO to go up by $2.00. Also, you calculations are based on a full load, what if the average load only has 12 people. I know then the fuel cunsumption would also be less but not on a linear equation so therefore the DZO's cost per ticket would be greater than your calculation.

I see and agree with your point, some people will use any excuse to up prices and take advantage of people. However, one must always look to the other side and not just assume that because he owns his own buisness, that he is getting stinking rich. Just my biased opinion from a buisness owner of 19 yrs.

Mike Igo at Gold Coast is currently charging $20 bucks for 14k, normally 15k on the last load of the day. I have been looking for an increase as he did several months ago to $21, but he came right back down as soon as fuel prices did the same.


Share this post


Link to post
Share on other sites
Quote

Remember guys a $1.00 increase in turbine fuel equals a $1.00 in jump prices if a DZO is going to breakeven on the price change.



Prices were $16 when I started jumping. No way it would make any sense that the price of jumps, now being $22, is being properly subsidized. But fuel more than effects the cost of a load...it directly effects cost of living too. I would hope this increase in the past years has a lot more to do with keeping the businesses going rather than taking advantage. [:/]

But 5 bucks more per person is a shitload of difference. And tandems are roughly the same cost, ironically (if not cheaper). WTF?

Share this post


Link to post
Share on other sites
No flame. I have been in business since 1974 so I know how cost and pricing works. My home dz has not raised prices either and has seen a significant increase in business as a result.

Each business owner has the right to do what he pleases, but he has no right to bitch about business being bad when his decision actually reduces his revenue.

You guys are quibbling about pennies which is bullshit! Rule of thumb is +$1 increase in fuel prices equals a $1 increase in jump ticket price. Ever heard of the KISS principal.

You guys want to compute breakeven points, rates of return, cost absorbtion, et al ad naseum go somewhere else.

I stand by my rule of thumb.

Blue skies,

Jim

Share this post


Link to post
Share on other sites
Nice chart, and amazingly close to some real life numbers I am familiar with. I was not saying you were wrong in the first place, just to be clear. I just get tired of everyone screaming that business owners are rich, corrupt, etc, when in fact lots of business owners are do no more than trying to keep their heads up in a dog eat dog world, but you know exactly what I mean if you have been in business since 74


Share this post


Link to post
Share on other sites
There is a mass e-mail going around that is trying to get people to stop buying gas from one of the large companies, lets say exxon-mobil.

If no one bought gas from this company they would have to lower thier prices forcing the other companies to do the same. Havent thought much about it but on the surface it sounds plausible.

Lets face it. the oil companies have posted the largest profits in history. exxon-mobile just knocked off walmart for #1
_______________


"It seemed like a good idea at the time"

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

0