While looking at the fuel price chart on the servers main site, I thought about whether some kind of a "price betting" option could be included into the game.
In real life airlines sign so called " future contracts " that allow them to buy a certain amount of fuel at certain price somewhen in the future. This is seen as some kind of an insurance against high rising fuel prices.
Of course this can also backfire, for instance when there is a decrease in demand for oil, e.g. during a fincial crises, as the future contract still must be executed.
As Airlinesim is only simulation, it might make sense to have simplified version of this. Players could buy/build bunkers and fill them with fuel at current market price. The player than can decide when to release the purchased fuel, e.g. when the market price is very high. In case of bankrupcy all fuel purchased is beeing "sold" to the world market and the return is added to the cash account.
Maybe it could also be possible to sell the filled bunkers to other players.
AS is a rather “strategic” than “tactic” simulation, therefore I do not like this idea. The problem is that many players don’t have so much time to always do the fuel hedging and in the long term the gains trough it a insignificant. There are so many factors involved in airline management that it is impossible to simulate them without making playing this game a full time job (that’s why there are so many people in the management of an airline in real life). AS should focus on the “strategic”, long-term decisions, rather than short-term “tactical” decisions.
I like the Idea but as it was already stated above it would be quite time intensive to have a look on the fuel prices. Another point is that there is no information on the actual fuel consumption at the moment.
Well, you know how much you are spending on fuel each week, so given the price information it’s quite easy to work out the consumption. In any case, the consumption in litres is not interesting, it’s the change in fuel costs each week which is important. My weekly fuel costs are about the same as my profit margin each week, however my operating cash liquidity is only sufficient to cover fuel costs for about 3-4 days, so fuel hedging only becomes interesting for me if my liquidity is about 10x more.
I don’t think that fuel hedging is a short term tactical decision, two examples: look at Southwest Airlines, which despite the current economic climate posted a profit and they declared it was registered thanks to fuel hedging, or Delta Airlines acquisition of an oil refinery which will provide 80% of its domestic fuel needs. Here’s an interesting analysis about DL’s fuel strategy and its refinery acquisition.
I think it would be nice to add some sort of hedging, considering today’s fuel prices any mean we’re given to lower those costs, or any other like maintenance i.e., would be gladly welcome.
And for Southwest Airlines they both had good and bad experience with fuel hedging. For a while, when the financial crises happened, their fuel prices remained low because of hedging contracts, but when fuel prices dropped for a few months, I think in 2010, their fuel prices were higher than other companies because of those contracts. So hedging is a good idea I think. I guess it could be something like the maintenance supplier page that already exists, just with more options and prices changing over time. And those prices could also change depending on how long the contract is going to be.