... and a drop in jet-kerosene prices that makes older planes attractive
Based on that one comment, said in passing, the cost of jet fuel has dropped enough that airlines now are looking for less-efficient designs.
That seems dangerous. Is airline fuel subsidized like automotive fuel is? At least, I doubt the airlines pay for the massive externality of climate change.
Fuel costs for an airline operating a regular schedule are much higher than their aircraft's capital cost, so changes to airlines' fleet plans induced by unexpected breaks in rising fuel price trends only really happen at the margin.
Where an airline chooses less-efficient designs it's usually because it's realising [partially] compensating efficiency savings by sharing pilots/engineers/equipment with similar aircraft it's already operating rather than simply because they cost less to buy.
Given the variety of specific notionally pro-environment levies on airlines and their passengers as well as on the fuel, figuring out how much per seat mile airlines actually pay is nearly as complex as guesstimating how much that aircraft's externality might be....
That's a good question. My understanding always has been that it is, especially in many indirect ways. For example, tax breaks and other government benefits for the oil and gas industry, as well as for the automotive industry. But I can't cite any off the top of my head.
One way it's indirectly subsidized, at extremely high cost, is the use of the U.S. military to protect industry assets, especially in the Mideast where we maintain a large, active military presence. As just part of the cost, the Iraq war cost the U.S. over $1 trillion. I very much doubt we would have been involved if there wasn't so much oil in and around Iraq. On the other hand, every import or export business relies on the peace, stability, and secure sea lanes provided by the U.S.'s foreign operations (military and diplomatic).
Comments
Based on that one comment, said in passing, the cost of jet fuel has dropped enough that airlines now are looking for less-efficient designs.
That seems dangerous. Is airline fuel subsidized like automotive fuel is? At least, I doubt the airlines pay for the massive externality of climate change.
Fuel costs for an airline operating a regular schedule are much higher than their aircraft's capital cost, so changes to airlines' fleet plans induced by unexpected breaks in rising fuel price trends only really happen at the margin.
Where an airline chooses less-efficient designs it's usually because it's realising [partially] compensating efficiency savings by sharing pilots/engineers/equipment with similar aircraft it's already operating rather than simply because they cost less to buy.
Given the variety of specific notionally pro-environment levies on airlines and their passengers as well as on the fuel, figuring out how much per seat mile airlines actually pay is nearly as complex as guesstimating how much that aircraft's externality might be....
Most Jet Fuel is bought in long term contracts, and swap deals are usually put in place as a hedge.
True, but Delta owns a refinery. http://articles.philly.com/2015-04-17/business/61222460_1_mo...
To the extent that supplies their fleet, they're still dependent on others to supply the right grades of crude for it. As the second sentence puts it:
Delta said the sharp drop in crude oil prices would translate into a $2.2 billion savings in jet-fuel costs in 2015.
I know gasoline is extremely cheap in some Middle-Eastern countries, but is gasoline subsidized in the U.S.?
That's a good question. My understanding always has been that it is, especially in many indirect ways. For example, tax breaks and other government benefits for the oil and gas industry, as well as for the automotive industry. But I can't cite any off the top of my head.
One way it's indirectly subsidized, at extremely high cost, is the use of the U.S. military to protect industry assets, especially in the Mideast where we maintain a large, active military presence. As just part of the cost, the Iraq war cost the U.S. over $1 trillion. I very much doubt we would have been involved if there wasn't so much oil in and around Iraq. On the other hand, every import or export business relies on the peace, stability, and secure sea lanes provided by the U.S.'s foreign operations (military and diplomatic).
No, it's taxed pretty heavily (well, not by European standards): https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_State...