One can have fuel surcharges with increased ticket prices, in the end it is the same for the airline and the customer.
A simplified fuel hedging can be implemented by adding an option to use not the current price but the average value of the last maybe 4 weeks and a small additional “hedging fee” of lets say 2%. Make a cooldown/delay like the Maintenance contractor of lets say also 4 weeks to avoid missuse. I’m pretty sure thats not that hard to implement and people can decide if they use or take the risk like in real life.
If you do fuel hedging in that way it can easily be misused. Two weeks ago it became clear to everyone following the news that fuel prices were on the rise. At that moment you can hedge the fuel prices of that moment for a little surcharge and then just profit from cheaper fuel. When fuel prices start droping you can cancel your hedging and again benefit from lower fuel prices.
In reality the price of fuel you get when hedging is based on market predictions. If companies expect prices to rise in the future you can set prices at a point that is above the current market price. If prices increase more than expected you benefit, if they don’t increase or increase less than expected you pay too much.
So, to implement fuel hedging in the game you would need a system that predicts fuel prices at least a few weeks in advance. Something that is very hard, if not impossible to do. Another way is to let the in-game fuel prices lag behind real world a lot more (maybe one or two months) and the data from real world prices can then be used to set price predictions in-game. But again, this is open to manipulation as players will eventually know when to hedge and when not to, and thus the more knowledgable players get an additional advantage over newer players.
I don’t think fuel surcharge is necessary. It’s the same thing as just rising the prices.
Fuel hedging I like. Just do it in it’s most simplified form. Anyone can buy as may liters of fuel whenever they want and add a storage fee. Also implement a maximum amount of stored fuel. Those liters will be used up and when there is no more fuel bought it will overgo to the normal fuel price system.
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Well, thats why there is a cooldown of weeks (averange goes in both directions), maybe an activation delay and the fee (you can change numbers as you want). Did you expect russia is doing full scale invasion which apparently takes some time? Not much did that.
Of course you can also use real life oil futures (as fuel price is usually bound to them) or dynamic fee on how much it’s used (like interest rates?) or something like that but we know this is not being implemented for known reasons but if this would be just an other thing to manage (in real life a lot of full time people are busy with this) instead of making the game less exhausting at the cost of a bit less profit.
You can also always use an average of a certain period with no choice to flatten spikes, but people seem to want “realism” and “challenges”.
Then rich airlines that can afford to buy fuel in advance can hedge and others can’t?
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I like the simplistic option of buying the fuel in bulk today, at today’s prices and a small percentage fee on top of that for storage.
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Yes. If you are a small airline in the real world, suppliers will not even offer you a hedging contract. With long term contracts it might be open to cheating and abuse. With one time payments it’s a bit more robust and easier to code.
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But even this option is just easy to use for players with a little more time. Say I play on Limatambo and I see on Kaitak that fuel prices increase, then at that moment I can fill up my fuel reserves at current prices and don’t feel the price increase for at least another week. While if on Kaitak the fuel price drops I don’t spend any money on fill up reserves.
And if I have even more time I can see what current real world fuel prices do and base my decisions on that.
It thus becomes an easy way for some players to get an advantage. In reality fuel hedging should just as often be cost negative as cost positive to the airline. If it would always be cost positive, there would be no company that provides the hedging against fuel prices (because that company does need to make money), and if it would always be cost negative then the airline wouldn’t do it. There should be an incentive like stability to hedge against fuel price variation, but also be a cost of it, say the risk of losing money. And this risk shouldn’t be undone by just getting more information.
That makes no sense, fuel prices are the same on all servers and change at the same time.
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Fuel prices aren’t updated at the same time. Every server has an update job called “fetch fuel prices” that runs once per day. The time this job is performed is different on each server. So, where this job is performed on Kaitak at 12:26:37, on Limatambo it is 19:44:03. This gives a player over 7 hours of time to see the change at Kaitak and adjust strategy on their own server (unless the player is on Kaitak in which case this strategy wouldn’t work).
Yes. If you are a small airline in the real world, suppliers will not even offer you a hedging contract.
There are different financial tools for fuel hedging in the real world. Even as small airline could for example do crosshedge with standard products like crude oil futures, options or similar available virtually to everyone wo has a bit money to buy them.
With long term contracts it might be open to cheating and abuse.
The only “long term” part is an activation/deactivation delay of lets say some weeks. Prices are not fixed and updates as of now by either history values (averange of some weeks?) or future ones (real world crude oil futures for example, more complicated, available data?).
So tell me how to cheat and abuse. You know fuel prices in 4 weeks? Not me and i guess nobody knows, nearly everything is possible.
With one time payments it’s a bit more robust and easier to code.
More robust vs what? Calculating an averange on existing values is really not that hard. Saving and looking up which value to use also not, this is already done on maintenance provider.
As Myquandro already pointed out, the “tank model” just not works because of information advantage until AS updates prices once a week. You can expect fuel price increase this week in AS by around 15% based on real world values and i would then fill up for one week just before update. And i can repeat this every week, if this is no cheating/abuse, then what? Additionaly uf i could buy fuel for several weeks, i guess i would have so much money i wouldn’t care about short spikes in pricing.
My goal is to protect airlines from to fast price changes for a small cost so they don’t have to use to much real life time to care about at once. And to make this a long term decision like real airlines are doing on hedging. Not an option you have to constantly care about be filling up storage. Airlinesim is reallife time consuming enough.
As far as I know, this is just a fetch daily. The only change is once-weekly. Though the last change did roll in at 19:43U… I’m sure me (and rob, as I know you do with detail that amazes me) will monitor this week’s change and see if the price updates at 12:26U on Kaitak.
If this is the case and it is updated at different times of the day, I agree with you: the time should not be varied across game worlds. Not sure how hard this is to correct in the backend, but definitely something to consider moving forward, maybe uniforming it at 0UTC or a fixed time.
I recently monitored fuel price on Kaitak that went like this:
| 22.03.2022 | 83,44 ASc$/l |
|---|---|
| 15.03.2022 | 70,65 ASc$/l |
| 08.03.2022 | 85,43 ASc$/l |
| 01.03.2022 | 65,72 ASc$/l |
This is a plus 29.9 %, -17.3 %, +18.1 % covering the last three changes. Real world data provided by IATA says this:
| 18 March | 383.4 |
|---|---|
| 11 March | 363.2 |
| 04 March | 387.4 |
| 25 February | 303.8 |
This is a +27.5%, -6.3%, +5.5%
I do wonder, why the changes on AS are that much more intense. In fact, when I noticed the huge price decrease last week I thought AS somehow softened the price impact as the price fell way stronger in AS than in real life. I spent time in trying to save my old airplane airline just to find that this was all senseless, when the price increased again way stronger than in real life.
It is completely fine to connect real world prices with ingame prices, but for me as a player this has to be anticipateable. As my data shows, it is not.
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Hi, thanks for the info! I’m sorry about the discrepancy, I can imagine that this may be due to different sources, as we didn’t change anything in the price calculation. I’ll forward this, though! 
Airlinesim fuel calculation is not based on weekly IATA data but data from just one weekday of us american kerosene spot markt price. Thats why there are stronger fluctuations. In situations like now every event can change the price significantly short term and it’s then valid for the whole week in airlinesim. That is why i have suggested several times to smooth such fluctuations by means of average values.
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I agree with your suggestion and a possible solution thus may be to rely on IATA prices as they seem to be averaged already?!
It’s actually not that hard to calculate an average value from the available daily prices of e.g. the last x days/week(s) if you want to. No need to adapt to the data structure of other websites, legal problems (terms of use) and the like.
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