Friday, July 4, 2008

For the Airlines

For me, personally, the problems associated with airlines have become so extreme that I usually don't choose to fly unless it is over a large ocean. Car or train is usually now a much better option because Amtrak for example, costs about half as much as paying for gas to drive my car most places now over about 100 miles.

However, I was listening to an airline executive say that airlines would have to eventually go out of business if oil was sustained above 130 dollars a barrel. It looks like we are already there.

I was thinking about this problem and it made sense to me for airlines in the United States to whenever possible to fill up their planes in Mexico because jet fuel likely costs less there, as long as there was a way to assure quality of fuel as equal to the United States. Otherwise, airlines who don't send as many flights through Mexico as possible will soon be out of business because of the price of jet fuel. Other countries where jet fuel might be less expensive might be Saudi Arabia, Venezuela, China etc. Do the research.

Mexico, at around $2.50 a gallon for regular might sell jet fuel less as well if it is refined there. So, for example, a Los Angeles to Miama flight might route through Mexico City or a more northern Mexico town to fill up with jet fuel. There might be other considerations than I might be aware of but without thinking outside the box the only airlines left alive will be out of Saudi Arabia, Mexico, Venezuela, China and a few others within a few years. Hopefully, the oil bubble will burst soon just like the dot com bust. But until then airlines must be very creative to stay in business.

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