boeingplt
Senior
- Nov 7, 2007
- 255
- 26
He said that USAirways, with it's new $140/barrel business plan, was profitable at $115/barrel
Now, between BOB..checked bags, 10% capacity cuts...et al...how much more profitable is the company at $45/barrel?
Start with 2.59bil and change (37mil for every $1 the price of oil changes/ 115-45= 70 x 37mil). Make even a robust adjustment if the economy continues to tank (historically recessions result in 3 to 4% reduction in revenues - for US that is 480mil. So 2.59bil - 480mil = 2.11bil profit.
Just a gouge but it gives an idea of the magnitude of the adjustments the company made for the price of oil and the importance of the relationship between the worsening economy and the decreasing price of oil.