Friday, October 21, 2005


In January the price of jet fuel was $1.19 in the Gulf of Mexico region, $1.24 in New York and $1.25 in Rotterdam. This past wednesday the price was $1.93 in Rotterdam, $2.07 at New York ports of call and $2.52 in the Gulf.

CAL made its 4th quarter forcast based on an average cost of fuel of $2.05. A number of analyst laughed. At the time, they assumed the cost would average around $2.35 per gallon. CAL will consume about 165 million gallons in the quarter. Assuming the average turns out to be half way between the Rotterdam price and the NY price or $2 per gallon, the analyst's projections were off by $.35 cents per gallon or $56 million for the quarter.

That was based on prices two days ago. Since that time prices have dropped another 5%. Pretty soon the savings of $56 million may become serious money. Indeed, the savings may reach more than a $1 per share for the quarter! Should CAL make it though 2006 and year $4 per share in 2007 we should be talking about a $40 stock.

The current CAL price is up .47 at 12.03; a 4% one day move. More to come! My young daughter, Whitney, purchased shares in CAL, AMR, and LCC this morning. Her Google gains gave her the confidenct to make the purchase. I love for young folks to participate in the wonderful world of capitalism. One's love for free enterprise and democracy grows when one learns to appreciate the ups and downs of the markets. It is not all fun but it is mostly fun. With the right attitude, young folks have an excellent chance of doing a lot of good in this old world. Knowing this young laddy like I do, I know she will help a lot of folks in her life. Making some nice profits off the airlines will help her in her lifes work. Go Google, Go CAL, Go AMR, Go LCC and Go Whitney!