Fuel Prices & Operational Changes
Posted 07 April 2008 - 03:08 AM
Economics do play a large role in any business and some tough decisions are made because of these issues. I see some challenging aviation times ahead that may cause operators to rethink the way they do business. Could this be more influx of single engine aircraft (less fuel burn)? Could some smaller operators get out of the business or declare bankruptcy like a lot of the low cost airlines? Could the amount of patient flights decrease by completing them by ground (although diesel is hitting over $4/gal in many markets)?
Only time will tell where all of this is going, but I suspect that the industry will change if the costs keep outpacing the revenue side of things.
Posted 07 April 2008 - 04:16 AM
If so, they'll supplement the fuel cost through higher rates.
Hard to justify raising rates when you already charge 10, 15 or 20K per flight with having an AC that cost $900.00 per hr flight time RW (that's on the high end)
University of Mississippi Medical Center
Posted 07 April 2008 - 10:18 AM
But just as a note - when auto gas was an average of US$1.50 a gallon (C$0.60 per liter) where we are based the price was C$0.80 per liter (US$2.00 a gallon) and in the communities we fly into, closer to C$1.00 a liter (US$2.50 a gallon). The Jet A that we had to buy while there just to get home again was a LOT more...
Now the gas cost is more like C$1.36 a liter (US$5.10 a gallon)...and yes, the exchange rates were factored in both for then and now. So in the communities, with gas at C$1.60 a liter (US$6.00 a gallon) so you can just imagine what Jet A costs in someplace like Holman Island or Pelly Bay...