Member Info for Thumper1127

@Stupmy. Thanks for posting your findings, lots to take away there. Setting aside the SP for the moment, I find it interesting to look at the dynamics and all of the interplay there is between different factors.

@Stupmy. Thanks for posting your findings, lots to take away there. Setting aside the SP for the moment, I find it interesting to look at the dynamics and all of the interplay there is between different factors.

@Stupmy. TBH, it was a notional figure I plucked out of the air but it would be easy to run it again with a different figure. I did specifically state Aviation fuel rather than oil though (as per your point). If you have time submit my original question but use a higher percentage. I used ChatGPT. It’s interesting as AI progressively gives you options. I haven’t posted everything as I thought it would clutter the board up a bit…

🎯 Step 5: “Unviable” threshold

There’s no single hard cutoff, but in short-haul LCC economics:

👉 £1.50–£2.00 per passenger disadvantage is a tipping point

Why?

• That’s ~3–5% of a typical fare

• Often larger than the airline’s profit margin per seat

⸻

🚨 Result

👉 This happens at roughly:

P ≈ £0.80–£1.10/kg

⸻

🧠 Interpretation

Below ~£0.70/kg

• A319 still workable

• Gap is small enough to absorb

£0.80–£1.10/kg

• ⚠️ A319 becomes clearly disadvantaged

• Fleet replacement decisions accelerate

Above ~£1.10/kg

• 🚫 A319 becomes structurally uncompetitive on many routes

• Airlines must:

• upgauge aircraft

• cut routes

• or raise fares disproportionately

⸻

✈️ Real-world context

This is exactly what happened post-COVID when fuel spiked:

• easyJet accelerated A319 retirements

• Shifted heavily to A320neo family

• Focused on higher seat density to dilute fuel cost

⸻

📊 Big takeaway

The A319 doesn’t suddenly “break”—it gets progressively squeezed out as fuel rises.

• The tipping point isn’t technical

• It’s economic per seat

⸻

For the same route and fare:

• A319 needs higher fare increases to break even

• A320neo can stay more competitive

Example at £60 average fare:

• A320neo: +£2.38 → ~4.0% increase

• A319: +£2.71 → ~4.5% increase

⸻

3. Strategic implication (this is the big one)

This is exactly why airlines like easyJet:

• Rapidly replaced A319s with A320/A320neo

• Prefer upgauging (more seats) during high fuel environments

👉 In a sustained fuel spike:

• A319 routes become first candidates for replacement or cuts

• Larger aircraft become structurally more profitable

⸻

📊 Key takeaway

A 30% fuel increase:

• Adds ~£2.38 per pax (A320neo)

• Adds ~£2.71 per pax (A319)

➡️ The A319 is ~14% more exposed per passenger to fuel shocks

⸻

If you want, we can push this one step further and model “at what fuel price does the A319 become unviable vs A320neo on this route”—that’s where it gets really interesting.

Now we’re getting into the really interesting territory—this is exactly the kind of threshold airlines like easyJet care about when deciding whether to keep or retire aircraft types.

If you want, we can push this one step further and model “at what fuel price does the A319 become unviable vs A320neo on this route”—that’s where it gets really interesting.

Now we’re getting into the really interesting territory—this is exactly the kind of threshold airlines like easyJet care about when deciding whether to keep or retire aircraft types.

Let’s find the fuel price at which the Airbus A319 becomes structurally uncompetitive vs the Airbus A320neo on your 400-mile route.

⸻

🧮 Step 1: Isolate the structural disadvantage

From your scenario:

• A319 fuel burn: 2,169 kg

• A320neo fuel burn: 2,065 kg

• Difference: +104 kg (A319 burns more)

Passenger difference:

• A319: 144 pax

• A320neo: 156 pax

👉 So the A319 has:

• Higher total fuel burn

• Fewer seats to spread cost

⸻

⚖️ Step 2: Cost per passenger formula

Let fuel price = P (£/kg)

A320neo fuel cost per passenger:

\frac{2065P}{156} = 13.24P

A319 fuel cost per passenger:

\frac{2169P}{144} = 15.06P

⸻

📊 Step 3: The gap (this is the key insight)

Difference:

15.06P - 13.24P = 1.82P

👉 So:

For every £1/kg fuel price, the A319 costs £1.82 more per passenger

⸻

🔥 Step 4: When does this become a problem?

Let’s translate that into real-world impact:

Fuel price A319 disadvantage per pax

£0.50/kg £0.91

£0.60/kg £1.09

£0.80/kg £1.46

£1.00/kg £1.82

£1.20/kg £2.18

2. Pricing pressure is asymmetric

For the same route and fare:

• A319 needs higher fare increases to break even

• A320neo can stay more competitive

Example at £60 average fare:

• A320neo: +£2.38 → ~4.0% increase

• A319: +£2.71 → ~4.5% increase

⸻

3. Strategic implication (this is the big one)

This is exactly why airlines like easyJet:

• Rapidly replaced A319s with A320/A320neo

• Prefer upgauging (more seats) during high fuel environments

👉 In a sustained fuel spike:

• A319 routes become first candidates for replacement or cuts

• Larger aircraft become structurally more profitable

⸻

📊 Key takeaway

A 30% fuel increase:

• Adds ~£2.38 per pax (A320neo)

• Adds ~£2.71 per pax (A319)

➡️ The A319 is ~14% more exposed per passenger to fuel shocks

Reality check (what easyJet would actually do)

easyJet would likely:

• Pass on some but not all of the £2.40

• Absorb part via:

• slightly higher load factors

• ancillary revenue (bags, seats)

• cost control elsewhere

So in practice:

👉 You might see fares rise ~£1.50–£3.00, not perfectly evenly across routes.

⸻

📊 Bottom line

A 30% fuel increase on a typical short-haul flight:

• Adds ~£2.40 per passenger

• Implies ~3–5% fare increases on common ticket prices

⸻

If you want, we can extend this to:

• Compare A319 vs A320neo sensitivity (ties nicely to your earlier fuel-burn work)

• Or model longer sectors (e.g. 1,000 miles) where fuel becomes a bigger share 👀

Great—this ties in nicely with your earlier numbers. Let’s directly compare how a fuel shock hits an Airbus A319 vs Airbus A320neo on that same 400-mile sector.

⸻

🧮 Base assumptions (from your scenario)

Aircraft Passengers Block fuel

A320neo 156 2,065 kg

A319 ~144 (typical LCC config) 2,169 kg

Fuel price baseline: £0.60/kg → +30% = £0.78/kg

⸻

⛽ Fuel cost impact per aircraft

✈️ A320neo

• Before: 2,065 × 0.60 = £1,239

• After: 2,065 × 0.78 = £1,611

• Increase: £372

👉 Per passenger:

£372 ÷ 156 ≈ £2.38

⸻

✈️ A319

• Before: 2,169 × 0.60 = £1,301

• After: 2,169 × 0.78 = £1,692

• Increase: £391

👉 Per passenger:

£391 ÷ 144 ≈ £2.71

⸻

⚖️ Direct comparison

Metric A320neo A319

Extra fuel cost (flight) £372 £391

Extra per passenger £2.38 £2.71

👉 A319 costs ~33p more per passenger under the same fuel shock

⸻

🧠 What this means in practice

1. Fuel shocks widen the efficiency gap

The **Airbus A320neo advantage becomes more valuable when fuel rises:

• Lower burn and more seats = double benefit

• The gap grows as fuel price increases

⸻

The question I put to AI:

Taking easyJet as an example, if the cost of aviation fuel increased by 30% how much would average fares have to be increased by to offset it?

Answer

To get a realistic estimate, you need to know roughly what proportion of an airline’s costs are fuel.

For easyJet, fuel typically accounts for about 25–30% of total operating costs (it fluctuates, but that’s a good industry-average range for a low-cost carrier).

Step-by-step logic

• Assume fuel = ~28% of total costs

• Fuel price increases by 30%

• Total cost increase = 0.28 × 30% ≈ 8.4%

What that means for fares

To fully offset that increase (ignoring demand effects, hedging, etc.):

➡️ Average fares would need to rise by roughly 7–10%

Why it’s not exact in reality

Airlines like easyJet wouldn’t necessarily pass it through 1:1 because:

• Fuel hedging smooths short-term spikes (easyJet usually hedges a large portion)

• Load factors (filling more seats) can absorb some cost

• Ancillary revenue (bags, seats, food) can offset fuel increases

• Competition pressure limits fare increases

• Operational tweaks (weight reduction, routing, speed changes)

Rule of thumb

A useful shortcut in aviation economics:

Every 10% rise in fuel costs ≈ ~2.5–3% increase in fares needed

So your 30% fuel increase → ~7.5–9% fare increase, which matches the calculation above.

⸻

If you want, I can run a more detailed model (e.g. per-seat impact on a typical A320 route like your 400-mile scenario) to show how this plays out in pounds per ticket.

Let’s build it using a typical Airbus A320neo easyJet-style flight—very close to the scenario you’ve looked at before.

⸻

🧮 Base scenario (your 400-mile sector)

• Passengers: 156

• Fuel burn (block): ~2,065 kg

• Fuel price (baseline): ~£0.60 per kg (typical ballpark)

👉 Fuel cost (before increase)

= 2,065 × £0.60 ≈ £1,239

👉 Fuel cost per passenger

= £1,239 ÷ 156 ≈ £7.94

⸻

⛽ After a 30% fuel price increase

New fuel price ≈ £0.78 per kg

👉 New total fuel cost

= 2,065 × £0.78 ≈ £1,611

👉 Increase in fuel cost

= £1,611 − £1,239 = £372 extra per flight

👉 Extra cost per passenger

= £372 ÷ 156 ≈ £2.38 per passenger

⸻

🎟️ Impact on ticket prices

Now translate that into fares:

If average fare = £50

• Increase needed: ~£2.40

• % increase: ~4.8%

If average fare = £70

• Increase needed: ~£2.40

• % increase: ~3.4%

If average fare = £100

• Increase needed: ~£2.40

• % increase: ~2.4%

⸻

🧠 Key insight

The absolute increase per passenger is small (~£2–£3), but:

• It hits low fares much harder in percentage terms

• That’s why low-cost airlines are very sensitive to fuel prices

More to follow…

Thanks again Avid. I’ll post some AI research on fuel prices/impact etc a bit later (it will spill into several posts I think purely due to size).

GLA

Re the impact on costs and potentially fare increases, I did some AI probing the other day. I’ll see if I can précis some of it but I can’t at the moment but will try later.

Limit triggered for another small top up at 356. All for LTH.

GLA

Thanks Avid.

I see there is a Times/Sunday Times article on which shares would be best to invest in. It’s behind a paywall so I don’t know the detail. Anyone know?

It seems there is a lot of radio coverage on switching holiday destinations, with Spain and Italy particularly mentioned. Also, Cape Verde was mentioned; EZJ added Cape Verde from Bristol of course, I’ll be keeping an eye on that.

GLA

Morning @Stille. Good to see you back. I’ve done two small top ups, just going to place another limit order.

Has it?…..

@Savage. Yes, you did say for a long time that it would “go sub-400 soon”, probably for over a year. And it has, but not for the reasons you cited which, amongst other things included;

Disinflation

Customer resistance to paying “high/extortionate fares” due to low oil prices”

So we currently have sub 400 but oil is up and the effects of that will no doubt be inflationary in due course, so by your logic….?

Unless I missed anything, you never explained why you singled out EZJ over and above other airlines. You have just reiterated that you believe it would go sub 400 without the Iran situation. Can you please give your reasons/thinking behind that? Let’s take Iran out of the equation; what are your EZJ-specific reasons - is it fundamentals, competition, strategy, market positioning etc?

I’ve put a small limit order in at 370 as a top up to my LTH. More may follow.

My average is 395.

@Gulf. Totally agree. Didn’t expect to be where we are now and short term very risky (for me anyway!). But for those with a longer horizon and strong stomachs, I see opportunity; it’s knowing when to take the plunge. Cash at the ready.