Saturday, May 23, 2015

Low Oil Prices And Discounts Are Providing Tailwind To The Boeing 777

[Full Article Here]


I performed a small analysis on the impact of low oil prices on the economics of the Boeing 777. I did this by analysing a sample flight from Dubai to Tokyo and vary the fuel prices between $1.87 per gallon and $3 per gallon and see how it affects the profit per flight. Using current fuel prices the profit for a single flight is about 6% higher. 
A detailed numercial analysis can be found in the link towards the article at the top and bottom of the block, but these are the main conclusions:

Summary

  • Low oil prices strengthen the business case for the Boeing 777 that can be delivered within 2-3 years at high discount rates
  • Low oil prices make the purchase of more expensive fuel efficient aircraft not immediately necessary.
  • Low oil prices can help Boeing filling the available delivery slots in the coming years
[Full Article Here]

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