Friday, November 12

new SWA article

it continues to amaze me... what kind of publicity Southwest Air gets in the financial media... in an article in the Wall Street Journal... Melanie Trottman tells of "tankering"...
Typically, the price spread on jet fuel between the Gulf Coast and the West is five to 10 cents, but the gaps have been even wider over the past year, partially because of the volatility in oil prices. Late last month, Gulf Coast jet fuel was $1.48 a gallon while fuel in Los Angeles was $1.61.
Though the extra weight increased the cost of operating the flights from Dallas -- heavier planes burn more fuel -- American still saved an average $400 on each round trip. With the carrier flying more than 35 daily round trips between Dallas and the Los Angeles area, total savings averaged more than $14,000 a day.
... so as you can see an airline can save money if they hire economists to calculate their benefit derived from buying cheaper fuel... there is a lot that goes into the calculation


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