Chapter 1697 Low Oil Price Is Not a Good Thing

(I came back late after working overtime again~(.?＿?.)?I’m sorry~)

Schuberg is right to say that there is a lack of effective integration. Although the New Era Cultural Tourism Group has been officially listed, little is known about the name, and many elites in the non-financial industry do not know that Amman has changed hands, and the new owner And the aircraft leasing company that has recently risen to fame is one.

This may be caused by insufficient publicity. If you have time to sort it out carefully, it should be much better.

But Schuberg obviously has a better plan, "boss, if possible, I hope to open the port directly in the app~"

Yang Cheng was stunned, "Isn't it already activated?"

"No, no, I mean that users of the Toutiao app can place orders directly in the app instead of jumping to our page. It is too troublesome. For high-income people whose time is money, re-register to place an order. It's a very cumbersome thing, sometimes they just have the impulse of an idea, and when the enthusiasm is over, they don't bother to go out to play anymore.

What we have to do now is to simplify the ordering process and catch those customers who are hesitant and have difficulty choosing.

According to the system records, quite a few people browsed our website and closed the page before placing an order. It may be that the relatively complicated process has dampened their enthusiasm. "

Yang Cheng frowned tightly, "Can the procedure be simplified?"

"Yes! For example, you can directly link up and down each campaign advertisement and jump directly to the order page. A ID number can complete the entire order process, and we should directly use the price to tell customers that the room grades are different, instead of using one A complex and incomprehensible room name to test the patience of potential customers."

Yang Cheng felt that what he said was very complicated, but in fact what he meant was very simple. Just withdraw from each travel package, such as $999, and you can enjoy the combination of Delta Air Lines business class and a certain suite in Amman. Of course, this price is just an example. , the specific price setting will be determined after research.

This has the advantage of retaining a sense of mystery, allowing passengers to maintain curiosity about the unknown next stop from the moment they step out of the house, just like people have a wonderful expectation for unpacking express delivery.

"Good idea, you can try it out for a while to see the effect, but right now we'd better take down Belmond first."

"It's the boss, I'll arrange it now~"

. . .

After the two went out,

Su Su came in and reported, "Boss, Mr. Bastian, CEO of Delta Air Lines, asked to meet~"

"He's in New York?"

"Yes, I'll be at the company soon~"

"Well~ bring him up directly~"

Yang Cheng guessed that it should be for Alitalia.

Sure enough, Bastian brought a piece of bad news.

"Mr. Yang, the Italian government has privately hinted that several of their local companies hope to come forward to acquire Alitalia, and they still hope to keep the flag carrier in their home country."

Yang Cheng was upset when he heard it, isn't this brain-dead? For the sake of face, disregarding the life and death of thousands of Alitalia employees?

"Are the negotiations still going on?"

"Yes, the two parties are arguing about the debt~"

Yang Cheng pondered, "Then suspend the negotiation and tell the Italian government that we don't have to buy it, we have better options~"

Bastian didn't take Alitalia too seriously, too much was just icing on the cake, just as Yang Cheng said, it doesn't have to be Alitalia.

"Mr. Yang, I came to New York to meet with you this time, mainly for the refinery. Our refinery in Pennsylvania has reached saturation. The purchase of the Pennsylvania refinery saved us 30% of fuel expenses. A key factor in Delta’s ability to emerge from the gloom.”

Yang Cheng interrupted, "You don't want to buy an oil refinery, do you? Now that Beihai Petroleum provides us with low-priced aviation fuel, the international oil price is hovering around $40. There is no need to invest in an oil refinery to reduce costs, right?"

Bastian couldn't help but smiled wryly, "Low oil prices are not a good thing for our aviation industry. History has proved that every time oil prices fall, the profits of airlines also fall to the bottom.

From 2001 to 2005, the U.S. aviation industry suffered substantial losses for five consecutive years, with a total loss of more than 60 billion U.S. dollars; in 2008, another huge loss of nearly 30 billion U.S. dollars occurred;

In the past two years, Delta Air Lines has continued to expand. Thanks to the cooperation with Beihai Petroleum, we have achieved a feat of steady growth even though the net profit of the entire industry has experienced negative growth. credit. "

Yang Cheng waved his hand, "Seriously~"

These guys, do you really think that you like listening to flattery so much?

Bastian smiled bitterly, "On the contrary, when the oil price is rising rapidly, whether it is the United States or country Z, the profits of airlines have ushered in growth.

Therefore, the current low oil price is not only an opportunity, but a big crisis. We must prepare for the winter in advance. "

Yang Cheng sighed, this is the last two days, how many times have you heard the topic of the industry's cold winter?

It seems that the global economy has serious problems, not just a certain industry.

Bastian thought that Yang Cheng didn't understand, and further explained, "In fact, the two are really related. In 2001, the Internet bubble had just burst, and 9/11 happened again, and the demand for business travel around the world shrank sharply.

In 2008, when the financial crisis broke out, travel demand decreased again, and aviation demand showed negative growth. Airlines had to reduce the number of flights. If the number of flights is not enough, the fuel demand will drop. All fuel buyers in the world will reduce their orders at the same time, and the price will naturally increase fall. "

Yang Cheng nodded, "I understand this. Although intuitively, falling oil prices can reduce fuel costs and indirectly increase profits, in fact, low oil prices are often the lowest points of the aviation industry, and high oil prices are also high points of the aviation industry.

This is because the level of oil prices often reflects the prosperity of the global economy and aviation demand.

The cycle of rising oil prices often means economic prosperity and strong demand. The increase in demand pushes up oil prices. Although airlines have increased costs, they can transfer part of the costs to passengers through fuel surcharges. This is why oil prices were at a high level in the previous cycle. The reason for the good performance is still under pressure.

In the same way, the decline in oil prices and the decline in social demand are also mutual causes and effects. "

Bastian took a sip of coffee, "That's what it means. In addition, when oil prices fall, airlines also encounter another kind of loss—fuel hedging losses."

Fuel hedging is a very common game in the international aviation industry. Simply put, airlines are watching the rise of oil prices all the way, and their own operating costs are getting higher and higher. In order to reduce losses, they do long crude oil in the futures market. If the oil price rises, If you make money in futures and lose money in costs, you can generally lose a little less, and vice versa.

When the oil price fluctuates little, fuel hedging can obtain relatively stable income and reduce costs, but once the oil price falls sharply, airlines may bear considerable economic losses.

Delta Air Lines is a big player in the crude oil futures market. Recently, due to the continuous low oil price, Delta Air Lines’ advantage in fuel cost expenses has been wiped out by several old rivals. At the same time, everyone has stumbled in the futures market , In this way, there are very few advantages left before, which makes the new management of Delta Air Lines fall into a deep panic. mix?

Can reinvesting in refineries solve the current predicament?

Bastian looked inscrutable, and leaned his head to speak mysteriously, but was pushed back by Yang Cheng with a smile and scolding, "Just say what you have to say, there are only the two of us in such a big office, and there are no bugs , don’t worry about divulging commercial secrets.”

Bastian sneered, "I'm used to it~ I'm used to it~"

He cleared his throat and said, "In order to canvass votes, Donald made a private announcement that he is going to promote the tax reform bill. The bill he is promoting is mainly aimed at the banking, energy and transportation industries. I believe he dare not joke about this kind of thing. As long as he dares to repent, it will only take a few minutes to step down, so..."

Yang Cheng nodded thoughtfully. He remembered that Richard Durbin had mentioned to him about Westinghouse Electric's application for tax rebate.

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