Getting Oil Out of the Equation
It’s been a tough month for airlines.
The following went bust (in alphabetical order): Aloha, ATA, Eos, Frontier and Skybus.
In addition, the following airlines announced first-quarter losses: Alaska (-$35.9 million), American (-$328 million), Delta (-$6.4 billion), Northwest (-$4.1 billion), United (-$537 million) and US Airways (-$236 million).
Meanwhile, on April 29, Royal Dutch Shell and BP announced quarterly profits of $14.4 billion for the first quarter of 2008.
Consumers are screaming bloody murder about the cost of gas and double-digit increases in food prices.
Retailers are whining that sales are way off and the cost of goods sold is higher.
The culprit: $115+ for a barrel of oil.
This is the 800-pound gorilla in the American economy.
Everybody seems to be pretending it’s a rhesus monkey.
The Demise of Eos Airlines
The April 4, 2006, issue of this cranky little e-zine discussed the launch of Eos, an all-business-class airline with three Boeing 757s flying from JFK to London’s Stansted Airport.
Eos round-trip fares were $4,500, $5,500 or $6,500, depending on whether you booked 30 days in advance with a Saturday-night stay-over, 14 days in advance or walk-up. “Guests” were given free limousine service and waited in the sumptuous Emirates Airlines lounge with free booze and gourmet nibbles.
On board, passengers discovered the Boeing 757 that normally held 220 passengers was configured for just 48 people, each ensconced in a kind of mini-suite with world-class service normally found only on luxury corporate jets.
However, in the words of one traveler: “Although Eos’ load factors have been around 70% to 80% (that’s really good), my flight wasn’t even half full. (It was a Tuesday – typically a slow travel day.)”
A 757 drinks 1,110 gallons of jet fuel per hour, costing roughly $26,800 over the seven-hour flight. That’s $558 per passenger, assuming 100% load. A 50% load represents $1,116 worth of jet fuel for each of the 24 passengers. This is comparable to the old Concorde SST, which used 1 ton of jet fuel for each passenger on a trans-Atlantic flight.