Air Transport World

Bring back those Convair 880s!

Just how cheap is jet fuel these days? In mid-December, a gallon of Jet A could be had for around 35 on the spot market. In 1970 dollars, that translates into around 8.3[cent] a gallon, a price not seen in at least 29 years. Of course, airlines aren't receiving all of the benefits of this windfall; many have hedged a significant portion of their annual fuel bill and they did so with the expectation that fuel prices probably would rise in 1998-99. Furthermore, as ATA Chief Economist Dave Swierenga points out, airlines can't buy all of their fuel at spot-market prices.

Brian Harris of Salomon Smith Barney makes another point: Air travel in the U.S. is a commodity and a strong correlation exists between fuel prices and the price of air travel. …

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