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  • #31
    Originally posted by FN-GM View Post
    Exactly. SQ won't be loosing out too much though. They are not buying much fuel at the moment so there isn't a huge loss there. When flights do start to get back to normal it will be the same for many other airlines. The price will increase as the demand increases.
    You are wrong. They hedge50% of jet fuel at US$74 for FY20/21 and 22% of Brent at Us$58. Even if they *** use, SQ still have to pay for the difference when due as these are actually financial products, not actual delivery. If they use only 20% of the fuel, they still have to pay the different based on the Amt they hedge

    Basically they are betting. They should just remove this hedge policy. The risk of loss is way more than the gain

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    • #32
      Originally posted by sbs2716g View Post
      You are wrong. They hedge50% of jet fuel at US$74 for FY20/21 and 22% of Brent at Us$58. Even if they *** use, SQ still have to pay for the difference when due as these are actually financial products, not actual delivery. If they use only 20% of the fuel, they still have to pay the different based on the Amt they hedge

      Basically they are betting. They should just remove this hedge policy. The risk of loss is way more than the gain
      Without going too far off topic, the point of fuel hedging is mainly to be able to have greater certainty of future fuel expenditure so they can plan their budgets and forecast cash flow accordingly. It's not a "bet" if they fully hedge their fuel consumption (i.e. risk of price swings are eliminated). If they are unhedged, the risk of loss (i.e. fuel prices going up, is unlimited) and the risk of gains (i.e. fuel prices going down, is limited - as in $0, barring the unusual situation of negative prices).

      In fact, the "betting" (i.e. in your example of only hedging 50% instead of 100%) has worked out well for them when prices have fallen now. You could always hedge none of your future expected fuel consumption, but there will be someone who will sing a very different tune when prices go up. SQ's shareholders likely want profits from an airline doing the principal activity of delivering cargo and passengers, not betting on the price of aviation fuel by being unhedged on its fuel bill.

      To that end, I believe being in a position to deliver better earnings estimates will help SQ to shore up investor confidence rather than having earnings swinging quarter to quarter just because their fuel bill is unhedged. I respectfully disagree on your point of removing the hedging policy, but perhaps it should reconsider how it can better take advantage of price decreases. I have a background in finance and accounting, but I won't claim to have the full picture of what goes on behind the scenes.

      Happy to be corrected on what I've said.

      Edit 1: To address the point you mentioned on using less than expected fuel - I'm not aware that there is any financial instrument which can hedge this operational risk (what I've discussed above is price risk). Maybe get insurance instead?
      Last edited by 9V-SML; 8 May 2020, 12:30 AM.

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      • #33
        Originally posted by 9V-SPL View Post
        Possibly the re-launch of BRU will be postponed?
        Airlineroute have just posted that SQ have updated the inventory for its upcoming BRU, still planned to launch from 25 Oct 20 onwards, however, they are displaying only full fare booking classes until end March 2021. Discounted fares will only be available from Apr 2021 onwards.

        The link to article is here: https://www.routesonline.com/news/38...45gmt-07may20/

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        • #34
          Originally posted by wlgspotter View Post
          Airlineroute have just posted that SQ have updated the inventory for its upcoming BRU, still planned to launch from 25 Oct 20 onwards, however, they are displaying only full fare booking classes until end March 2021. Discounted fares will only be available from Apr 2021 onwards.

          The link to article is here: https://www.routesonline.com/news/38...45gmt-07may20/
          My bet is that new bookings are being discouraged through pricing and that existing bookings are likely to get an email advising them of a shift onto a codeshared flight to/from another European port that SQ already serves.

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          • #35
            Originally posted by SQ228 View Post
            My bet is that new bookings are being discouraged through pricing and that existing bookings are likely to get an email advising them of a shift onto a codeshared flight to/from another European port that SQ already serves.
            Perhaps to make up for poor loads, SQ is seeking to maximise revenue and yield from those who still have to fly? April 2021 is in line with expectations of when discretionary leisure travel will pick up, so before then a higher proportion of travellers are likely to be corporate and may be less averse to more expensive fares.

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            • #36
              Originally posted by Jumbojet Lover View Post
              Perhaps to make up for poor loads, SQ is seeking to maximise revenue and yield from those who still have to fly? April 2021 is in line with expectations of when discretionary leisure travel will pick up, so before then a higher proportion of travellers are likely to be corporate and may be less averse to more expensive fares.
              Many pundits are saying that corporate travel will probably remain in a slump as people realize the benefits of teleconferencing, but oh well...
              an infrastructure geek

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              • #37
                With rules like 14 day quarantine on arrival
                https://www.channelnewsasia.com/news...ports-12717310

                It’s gonna make traveling restrictive enough I doubt people unless essential requirements would want to commit to 14 days.

                Not sure about most folks but social is still part of life and interaction is very important. One part about work at home n video conferencing is that I can’t gauge the emotional responses and sentiments and that is very crucial in many aspects of life. Take that away and a lot of decisions and transactions are going to miss fire in my opinion so the travels and meeting will happen but I think we have to be more efficient and effective and cut down on the unnecessaries.

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                • #38
                  Originally posted by yuuka_miya View Post
                  Many pundits are saying that corporate travel will probably remain in a slump as people realize the benefits of teleconferencing, but oh well...
                  When videoconferencing first arrived it was expected that corporate travel would suffer. But it did not, because it was difficult to replace the 'human touch' of a face-to-face meeting in person, like what alian cited. So I'll echo the belief that this crisis will likely not have as great an impact on the volume of corporate travel as believed, just that it will be done more efficiently.

                  What will likely change is corporate travel policies. After events like 9/11, SARS, the 2008 GFC, premium travel demand declined. First Class travel downgraded to Business Class, Business Class travel downgraded to Premium Economy/Economy, and I don't think premium class traffic ever returned to the same numbers as before.

                  I sure hope First/Suites does not go away at airlines like SQ, but perhaps Business Class could shrink in favour of an expanded Premium Economy cabin.

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                  • #39
                    Originally posted by Jumbojet Lover View Post
                    I sure hope First/Suites does not go away at airlines like SQ, but perhaps Business Class could shrink in favour of an expanded Premium Economy cabin.
                    As much as I don't want to admit this... I think first will go as some point. The number of First class seats has been decreasing over the years. Events like this won't help.

                    Comment


                    • #40
                      Originally posted by alian View Post
                      With rules like 14 day quarantine on arrival
                      https://www.channelnewsasia.com/news...ports-12717310

                      It’s gonna make traveling restrictive enough I doubt people unless essential requirements would want to commit to 14 days.

                      Not sure about most folks but social is still part of life and interaction is very important. One part about work at home n video conferencing is that I can’t gauge the emotional responses and sentiments and that is very crucial in many aspects of life. Take that away and a lot of decisions and transactions are going to miss fire in my opinion so the travels and meeting will happen but I think we have to be more efficient and effective and cut down on the unnecessaries.
                      Yes, sometimes you need to look someone in the eye, and ask do I trust him/her? My company is looking to do an acquisition and it just will not happen until we can meet face to face.

                      Some business travel has probably been unnecessary in the past - a few years back the Singapore office's CEO and I as CFO flew to London for a meeting with some based there and others flown in from NY, to discuss budget cuts...

                      Comment


                      • #41
                        Originally posted by FN-GM View Post
                        As much as I don't want to admit this... I think first will go as some point. The number of First class seats has been decreasing over the years. Events like this won't help.
                        The covid19 experience and the wide use of teleconferencing which includes better new and secure apps, this will definitely result in some drop for business travel post covid19. First class seatswill be reduced and some even removed completely. Even before covid19 we have seen SQ reducing its suites from 12 to 6 on the A380s and from 12 to just 4 in its 77Ws, and there are no F seats in the A350s. However Premium economy seats may increase and some reduction in business class is very possbile for planes with more than 50 business seats.

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                        • #42
                          On the discussion on reduction in Business Travel...

                          The same was expected after 9/11 & SARS, but generally the growth in Tech companies (who started to spend massively on travel) shielded some of the impact of the reductions. So, it will be interesting to see how they change. The other big companies, i believe will continue to spend as nature of their business requires travel.

                          1. Deloitte
                          2. IBM
                          3. PwC
                          4. Apple
                          5. EY
                          6. McKinsey & Co.
                          7. Accenture
                          8. Microsoft
                          9. Boeing
                          10. ExxonMobil
                          11. Google
                          12. Amazon
                          13. Lockheed Martin
                          14. GE
                          14. The World Bank
                          16. KPMG LLP
                          17. Bank of America
                          18. Facebook
                          19. JPMorgan Chase & Co.
                          20. BCG

                          https://www.businesstravelnews.com/C...ravel-100/2019

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                          • #43
                            Originally posted by Jumbojet Lover View Post
                            When videoconferencing first arrived it was expected that corporate travel would suffer. But it did not, because it was difficult to replace the 'human touch' of a face-to-face meeting in person, like what alian cited. So I'll echo the belief that this crisis will likely not have as great an impact on the volume of corporate travel as believed, just that it will be done more efficiently.

                            .
                            The technology has evolved. just 1-2 years back, videoconferencing was a pain because it was not smooth, time lag, lines dropped, couldn't do mark ups, etc.

                            Today it's different. It has exponentially evolved and it will continue to do so in the next few months (if not weeks). In my line of work, my teams are 3000 miles away and i don't find any drop in productivity at all so far. There is no going back now. Zoom is the new whatsapp.

                            IMO, business travel will be half or less than what it used to be. Only essential business travel by very senior people to close deals or to firefight issues.

                            All the airlines and the hotel industry must adapt to the new paradigm. We will see a lot of casualties.

                            Comment


                            • #44
                              Originally posted by SQueeze View Post
                              The technology has evolved. just 1-2 years back, videoconferencing was a pain because it was not smooth, time lag, lines dropped, couldn't do mark ups, etc.

                              Today it's different. It has exponentially evolved and it will continue to do so in the next few months (if not weeks). In my line of work, my teams are 3000 miles away and i don't find any drop in productivity at all so far. There is no going back now. Zoom is the new whatsapp.

                              IMO, business travel will be half or less than what it used to be. Only essential business travel by very senior people to close deals or to firefight issues.

                              All the airlines and the hotel industry must adapt to the new paradigm. We will see a lot of casualties.
                              Probably will have some impact, but not that bad.

                              https://www.nytimes.com/2020/04/29/s...gtype=Homepage

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                              • #45
                                Or roles like engineering that for obvious reasons cannot be done remotely.
                                an infrastructure geek

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