bottom candle today, page-2

sabre,

the problem hasn't been solved.

here is some info from the half years to dec 31 06 and 07.

in the half year to december 06,

1/ oil average $57/barrel
2/ operating expenses were $934.7 million
3/ fuel and oil contributed $262.3 million
4/ npat $124.3 million

so fuel made up 28% of the operating costs

in the half year to december 07

1/ oil averaged $75/barrel
2/ operating expenses were $1,035.8 million
3/ fuel and oil contributed $266.3 million
4/ npat $113.3 million

so fuel made up 25.7% of the operating costs....this is down from 28% even though oil averaged $75 compared to $57 in the corresponding period.

now lets look at what has been announced.

a/ a $50 million cost saving plan
b/ fuel now makes up 35% of the operating costs

now lets assume the following in the june half 08.

1/ operating expenses $1,035.8 million (i will keep it the same as half year to dec 31 07)
2/ fuel and oil contributes 35% of the operating expenses = $362 million.

so vba have announced a $50 million saving plan but fuel costs for the half year to june 08 have risen $96.2 million.

nothing has really been done to address capacity accross the network and yields will likely continue to fall whilst fuel will continue to rise and a loss is likely.

i personally think you needed more done to justify holding.

cheers