Business
Why Cheaper Jet Fuel Won’t Mean Lower Airfares Anytime Soon
DAVID KOENIG, AP Airlines Writer
DALLAS (AP) — Airlines will save billions this year thanks to cheaper jet fuel, but they aren’t likely to share the bounty with passengers — not while so many flights are already full.
Instead, the airlines will use their windfall to pay down debt and reward shareholders.
Airline CEOs worry that oil prices could just as easily go higher. They hope consumers benefiting from cheaper gasoline will splurge on airline tickets. But the biggest reason airfares aren’t falling: Planes are plenty full at current prices.
Fuel is the biggest single expense at most airlines, and spot prices for jet fuel have tumbled by half since mid-September. If prices stay around these levels, U.S. airlines could save $20 billion this year by some estimates.
The road to fuel savings at an airline isn’t always as simple as it is for a driver at a gas station.
Airlines often buy contracts known as hedges to protect themselves against sudden upward swings in fuel prices. However, when the price of oil crashes, those contracts can lose a great deal of value. Analysts say the accounting losses will be more than offset by lower fuel prices.
For example, Delta Air Lines Inc., the nation’s third-biggest airline company, reported Tuesday that it spent $342 million less on fuel in the fourth quarter than it did a year earlier. But it reported a $712 million loss because it had to write down the value of future fuel-hedging contracts by $1.2 billion.
Airlines won’t benefit equally from cheaper fuel because some, like Delta, will suffer losses on their hedging strategy. The biggest winner could be American Airlines Group Inc., which generally does not hedge.
Airline executives also cite the volatility of oil prices — they spiked to records in 2008, collapsed, then surged again until the recent drop — as a reason not to cut fares now.
Delta CEO Richard Anderson said Tuesday that his airline expects to save $2 billion this year on fuel, even with hedging losses. He said Delta will pay down debt and reward shareholders by buying back company shares, which raises the value of the remaining stock. As for passengers, he suggested that they can shop around.
“The marketplace is incredibly competitive, and there are always differences in fares,” Anderson said.
The prospect of cheaper fuel led Moody’s Investors Service to raise its outlook for airlines this week from “stable” to “positive.” Moody’s analysts say that if crude oil is $55 per barrel all year long — it was trading for $48 on Tuesday — fuel costs at seven of the biggest U.S. airlines will fall about $20 billion in 2015 compared with last year. Even with hedging give-backs, they will come out ahead by $15 billion, Moody’s says.
Delta’s results on Tuesday are expected to be followed with strong fourth-quarter reports later this week from United and Southwest, and next week by American Airlines.
Travelers who expect airfares to drop when fuel becomes cheaper assume that airlines calculate ticket prices based on their costs.
That used to be true, says Robert Mann, a former airline executive who now consults to the industry. A decade or more ago, a financially weak airline would cut fares to sell tickets and raise desperately needed cash by filling seats that would otherwise fly empty. Not anymore.
“The industry is full at these prices,” Mann says. “You couldn’t stimulate additional revenue by cutting prices.”
Mergers have left four airline companies controlling more than 80 percent of the U.S. market. And they have been very slow to add new flights. That makes planes more crowded. U.S. airlines are filling more than 85 percent of their seats in some months — close to record levels, according to the government.
“Right now the airlines have a great balance of supply and demand, and they are using it to ratchet up fares,” says Jim Corridore, an airlines analyst for S&P Capital IQ.
By last summer, U.S. airfares had increased 5 percent in a year and 31 percent in five years, according to government figures.
Besides, Corridore says, passengers didn’t offer to pay more when fuel prices were high.
Some analysts worry that airlines will use cheaper fuel to justify adding lots of flights, which could drive down fares. So far that hasn’t happened in the U.S., although for reasons other than cheap fuel there is overcapacity on some international routes.
There is an increasingly popular view within the industry that cheaper oil might even lead to higher airfares. The theory goes that consumers who are saving money on gasoline and heating bills now have extra cash to spend on travel. Moody’s says that is one reason travel demand will grow at least 5 percent this year.
___
David Koenig can be reached at http://twitter.com/airlinewriter
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Activism
Books for Ghana
We effectively facilitated cross-continent community building! We met the call and provided 400 books for ASC’s students at the call of the Minister of Education. We supported the work of a new African writer whose breakout novel is an action-packed depiction of a young woman steeped in Ghanaian culture who travels to the USA for college, all the while experiencing the twists, turns, and uncertainties that life brings.
By Min. Rauna Thurston, Chief Mpuntuhene Afua Ewusiwa I
My travels to Afrika began in June 2022, on a tour led by Prof. Manu Ampim, Director of the organization Advancing The Research. I was scheduled to become an ordained Minister by Wo’se Community of the Sacred African Way. It was vital that my feet touch the soil of Kemet and my spirit connect with the continent’s people before ordination.
Since 2022, I’ve made six trips to Afrika. During my travels, I became a benefactor to Abeadze State College (ASC) in Abeadze Dominase, Ghana, originally founded by Daasebre Kwebu Ewusi VII, Paramount Chief of Abeadze Traditional Area and now run by the government. The students there were having trouble with English courses, which are mandatory. The Ghanaian Minister of Education endorsed a novel written by 18-year-old female Ghanaian first-time writer, Nhyira Esaaba Essel, titled Black Queen Sceptre. The idea was that if the students had something more interesting to read, it would evoke a passion for reading; this seemed reasonable to me. Offer students something exciting and imaginative, combined with instructors committed to their success and this could work.
The challenge is how to acquire 800 books?!
I was finishing another project for ASC, so my cash was thin and I was devoid of time to apply for annual grants. I sat on my porch in West Oakland, as I often do, when I’m feeling for and connecting to my ancestors. On quiet nights, I reminisce about the neighborhood I grew up in. Across the street from my house was the house that my Godfather, Baba Dr. Wade Nobles and family lived in, which later became The Institute for the Advanced Study of Black Family Life & Culture (IASBFLC). Then, it came to me…ancestors invited me to reach out to The Association of Black Psychologists – Bay Area Chapter (ABPsi-Bay Area)! It was a long shot but worth it!
I was granted an audience with the local ABPsi Board, who ultimately approved funding for the book project with a stipulation that the Board read the book and a request to subsequently offer input as to how the book would be implemented at ASC. In this moment, my memory jet set to my first ABPsi convention around 2002, while working for IASBFLC. Returning to the present, I thought, “They like to think because it feels good, and then, they talk about what to do about what they think about.” I’m doomed.
However, I came to understand why reading the book and offering suggestions for implementation were essential. In short: ABPsi is an organization that operates from the aspirational principles of Ma’at with aims of liberating the Afrikan Mind, empowering the Afrikan character, and enlivening: illuminating the Afrikan spirit. Their request resulted in a rollout of 400 books in a pair-share system. Students checked out books in pairs, thereby reducing our bottom line to half of the original cost because we purchased 50% fewer units. This nuance promoted an environment of Ujima (collective work & responsibility) and traditional Afrikan principles of cooperation and interdependence. The student’s collaborative approach encouraged shared responsibility, not only for the physical book but for each other’s success. This concept was Dr. Lawford Goddard’s, approved by the Board, with Dr. Patricia “Karabo” Nunley at the helm.
We effectively facilitated cross-continent community building! We met the call and provided 400 books for ASC’s students at the call of the Minister of Education. We supported the work of a new African writer whose breakout novel is an action-packed depiction of a young woman steeped in Ghanaian culture who travels to the USA for college, all the while experiencing the twists, turns, and uncertainties that life brings. (A collectible novel for all ages). A proposed future phase of this collaborative project is for ASC students to exchange reflective essays on Black Queen Sceptre with ABPsi Bay Area members.
We got into good trouble. To order Black Queen Sceptre, email esselewurama14@gmail.com.
I became an ordained Minister upon returning from my initial pilgrimage to Afrika. Who would have imagined that my travels to Afrika would culminate in me becoming a citizen of Sierra Leone and recently being named a Chief Mpuntuhene under Daasebre Kwebu Ewusi VII, Paramount Chief of Abeadze Traditional Area in Ghana, where I envision continued collaborations.
Min. Rauna/Chief Mpuntuhene is a member of ABPsi Bay Area, a healing resource committed to providing the Post Newspaper readership with monthly discussions about critical issues in Black Mental Health, Wealth & Wellness. Readers are welcome to join us at our monthly chapter meetings every 3rd Saturday via Zoom and contact us at bayareaabpsi@gmail.com.
Black History
Alice Parker: The Innovator Behind the Modern Gas Furnace
Born in Morristown, New Jersey, in 1895, Alice Parker lived during a time when women, especially African American women, faced significant social and systemic barriers. Despite these challenges, her contributions to home heating technology have had a lasting impact.
By Tamara Shiloh
Alice Parker was a trailblazing African American inventor whose innovative ideas forever changed how we heat our homes.
Born in Morristown, New Jersey, in 1895, Parker lived during a time when women, especially African American women, faced significant social and systemic barriers. Despite these challenges, her contributions to home heating technology have had a lasting impact.
Parker grew up in New Jersey, where winters could be brutally cold. Although little is documented about her personal life, her education played a crucial role in shaping her inventive spirit. She attended Howard University, a historically Black university in Washington, D.C., where she may have developed her interest in practical solutions to everyday challenges.
Before Parker’s invention, most homes were heated using wood or coal-burning stoves. These methods were labor-intensive, inefficient, and posed fire hazards. Furthermore, they failed to provide even heating throughout a home, leaving many rooms cold while others were uncomfortably warm.
Parker recognized the inefficiency of these heating methods and imagined a solution that would make homes more comfortable and energy-efficient during winter.
In 1919, she patented her design for a gas-powered central heating system, a groundbreaking invention. Her design used natural gas as a fuel source to distribute heat throughout a building, replacing the need for wood or coal. The system allowed for thermostatic control, enabling homeowners to regulate the temperature in their homes efficiently.
What made her invention particularly innovative was its use of ductwork, which channeled warm air to different parts of the house. This concept is a precursor to the modern central heating systems we use today.
While Parker’s design was never fully developed or mass-produced during her lifetime, her idea laid the groundwork for modern central heating systems. Her invention was ahead of its time and highlighted the potential of natural gas as a cleaner, more efficient alternative to traditional heating methods.
Parker’s patent is remarkable not only for its technical innovation but also because it was granted at a time when African Americans and women faced severe limitations in accessing patent protections and recognition for their work. Her success as an inventor during this period is a testament to her ingenuity and determination.
Parker’s legacy lives on in numerous awards and grants – most noticeably in the annual Alice H. Parker Women Leaders in Innovation Award. That distinction is given out by the New Jersey Chamber of Commerce to celebrate outstanding women innovators in Parker’s home state.
The details of Parker’s later years are as sketchy as the ones about her early life. The specific date of her death, along with the cause, are also largely unknown.
Activism
2024 in Review: Seven Questions for Frontline Doulas
California Black Media (CBM) spoke with Frontline Doulas’ co-founder Khefri Riley. She reflected on Frontline’s accomplishments this year and the organization’s goals moving forward.
By Edward Henderson, California Black Media
Frontline Doulas provides African American families non-medical professional perinatal services at no cost.
This includes physical, emotional, informational, psychosocial and advocacy support during the pregnancy, childbirth and postpartum period. Women of all ages — with all forms of insurance — are accepted and encouraged to apply for services.
California Black Media (CBM) spoke with co-founder Khefri Riley. She reflected on Frontline’s accomplishments this year and the organization’s goals moving forward.
Responses have been edited for clarity and length.
Looking back at 2024, what stands out to you as your most important achievement and why?
In 2024, we are humbled to have been awarded the contract for the Los Angeles County Medical Doula Hub, which means that we are charged with creating a hub of connectivity and support for generating training and helping to create the new doula workforce for the medical doula benefit that went live in California on Jan. 1, 2023.
How did your leadership and investments contribute to improving the lives of Black Californians?
We believe that the revolution begins in the womb. What we mean by that is we have the potential and the ability to create intentional generational healing from the moment before a child was conceived, when a child was conceived, during this gestational time, and when a child is born.
And there’s a traditional saying in Indigenous communities that what we do now affects future generations going forward. So, the work that we do with birthing families, in particular Black birthing families, is to create powerful and healthy outcomes for the new generation so that we don’t have to replicate pain, fear, discrimination, or racism.
What frustrated you the most over the last year?
Working in reproductive justice often creates a heavy burden on the organization and the caregivers who deliver the services most needed to the communities. So, oftentimes, we’re advocating for those whose voices are silenced and erased, and you really have to be a warrior to stand strong and firm.
What inspired you the most over the last year?
My great-grandmother. My father was his grandmother’s midwife assistant when he was a young boy. I grew up with their medicine stories — the ways that they healed the community and were present to the community, even amidst Jim Crow.
What is one lesson you learned in 2024 that will inform your decision-making next year?
I find that you have to reach for your highest vision, and you have to stand firm in your value. You have to raise your voice, speak up and demand, and know your intrinsic value.
In a word, what is the biggest challenge Black Californians face?
Amplification. We cannot allow our voices to be silent.
What is the goal you want to achieve most in 2025?
I really would like to see a reduction in infant mortality and maternal mortality within our communities and witness this new birth worker force be supported and integrated into systems. So, that way, we fulfill our goal of healthy, unlimited birth in the Black community and indeed in all birthing communities in Los Angeles and California.
-
California Black Media4 weeks ago
California to Offer $43.7 Million in Federal Grants to Combat Hate Crimes
-
Black History4 weeks ago
Emeline King: A Trailblazer in the Automotive Industry
-
California Black Media4 weeks ago
California Department of Aging Offers Free Resources for Family Caregivers in November
-
California Black Media4 weeks ago
Gov. Newsom Goes to Washington to Advocate for California Priorities
-
Activism3 weeks ago
Oakland Post: Week of November 27 – December 3, 2024
-
Activism4 weeks ago
OCCUR Hosts “Faith Forward” Conference in Oakland
-
Activism4 weeks ago
Richmond Seniors Still Having a Ball After 25 Years
-
Activism2 weeks ago
Butler, Lee Celebrate Passage of Bill to Honor Congresswoman Shirley Chisholm with Congressional Gold Medal