Originally Posted by
Beagle
Fuel prices appear to be emerging as a headwind for 2018 to add to AIR's woes. Crude closed at its highest level since 2014 at the end of 2017 and have moved slightly higher since then and has now clearly broken out to the upside of a multi year trading range. Air have pretty good forward cover, for the next six months, but some experts on CNBC are calling Brent Crude to go as high as $80 barrel later this year, which could see Singapore Jet trading above $90. Speaking of headwinds, I noticed on New Years day AIR had a range of specials to Honolulu departing from Auckland and a range of other departure points for various really cheap prices e.g. $458 return from Auckland, which is the cheapest I have ever seen, flying on one of their Dreamliner's. Just 20 seats on special and I noticed by the end of the day not a single one had been sold. Make of that what you will but I wasn't game notwithstanding that Feb / March is a great time of year to go there with temp's a little cooler than normal averaging a very nice 27 degrees. I suspect consumers have got used to dirt cheap airfares. It will be interesting to see how demand holds up when Air fares have to start reflecting increased fuel costs. Good that no more engines have spat the dummy so far...