January 18, 2012
Weekly Issue: 030112
Contents:
Commentary by Bob Booth
Flight Control Waves
Waves from the Pacific
Waves from the Americas
Financial Waves
Cargo Waves
Tourism Waves
Fuel Waves by Larry Weaver
Commentary
by Bob
Booth
It’s been a busy week in the
airline business
As both Etihad Airways and Alaska Airlines win awards it is apparent that the airlines around
the world are being recognized for their leadership – congratulations to both
of them! Other important news includes (but is not limited to) Hawaiian Airlines creating a new hub in
Maui to expand operations; Singapore
Airlines now operating A380 to Frankfurt and New York – it currently
operates 15 Superjumbos, with four more on order;
code sharing continues to expand the “virtual alliances” throughout the world,
with ANA and Hawaiian, Delta and Westjet all expanding their network. LAN and TAM announcing
new (higher) profit estimates for its planned LATAM major group. Financial Waves continues to report significant growth with
Copa Airlines planning to carry 10 million
passengers in 2012; airberlin carrying record number of passengers
in 2011; IAG increasing its December
traffic by 10% year-over-year; Lufthansa
carrying a record 106 million passengers in 2011 for an increase of 7.5%
year-over-year; Grupo Aeromexico reported
record growth in 2011 with 14 million passengers for a 20% growth; and Etihad reporting another record year of
growth in both passenger and cargo traffic. And World Airways extending its cooperation with allied Cargo as the airlines agree on a multi-year ACMI contract. And don’t forget
tourism, the driver of many economies around the world, especially in Central America and the Caribbean. Read all about it under the
headlines listed below, and the entire Air
Waves issue this week. While many economies are in trouble, the airline
business continues to grow and expand, create jobs, investments and profit. Stay tuned and enjoy life.
Etihad Airways named World’s Leading Airline at World Travel Awards
Alaska Airlines is the winner of the Joseph S. Murphy industry award by ATW
Hawaiian Airlines to create a Maui hub to expand operations
Singapore Airlines now operating A380 to Frankfurt and New York
ANA and Hawaiian Airlines launch code share and Frequent Flyer program
Delta Air Lines and WestJet launch code share service
Porter Airlines is arriving at Washington Dulles International Airport
LAN and TAM announce new profit estimate for LATAM Airlines group
Copa Airlines plans to carry 10 million passengers in 2012
Airberlin carries record number of passengers in 2011
IAG reports it carried 10% more
traffic in December
Lufthansa reports it carried a
record 106 million passengers in 2011
Grupo Aeromexico carried more than 14 million
passengers in 2011
Etihad Airways reports record passenger and cargo in 2011
TACA has launched flights from Cusco to Puerto Maldonado & Arequipa
Transportes Aereos de Guatemala (TAG) to launch Flores and Cancun service
World Airways has extended its
cooperation with Allied Air Cargo
Flight Control Waves
IATA FIDAE Wings of
Change Latin American Aviation Summit.
The
IATA FIDAE Wings of Change Conference (WOC) is the premier Latin American forum which addresses the
aviation industry in Latin
America and The
Caribbean. The 2012 version of this event, promises to be the best yet, with
additional events and a new format that will enable delegates to take full
advantage of their attendance. Mark your calendars for 28-29 March, Wings of Change,
Santiago, Chile. Additionally, WOC is held within the most important Latin American Air Show, FIDAE
2012. Contact: Gustavo Di Cio at gdicio@abiaxair.com.
Airline Business Confidence Index
- January 2012
Released 16 January,
2012: (key points from the IATA full report on the quarterly
survey of airline business confidence).
• Airline
industry confidence has continued to decline - a majority of respondents
reported deteriorations in profitability in the fourth quarter and the trend is
expected to continue in the year ahead;
• There
was a particularly sharp decline in expectations for traffic growth, both for
passenger and cargo markets;
• Input
costs remained high in Q4, with 73% of CFOs and cargo heads indicating they
experienced upward cost pressure. The outlook, however, shows some relief;
• Yield
expectations remain at low levels, with passenger yields expected to do little
better than stabilize over the next 12 months. Cargo yields came under
significant demand pressure in Q4. Breakeven load factors remain high as a
result;
• Profit
and traffic confidence expectations have now fallen to levels seen at the start
of 2009, a period when the industry was generating losses and travel volumes
had weakened sharply.
Waves from Europe
Airberlin carries record number of passengers in 2011
Germany’s second
largest airline continues to grow, with 2011 passengers growing 1.2% to reach
35.3 million with load factor increasing 1.8 points to 78.2% while capacity
decreased by 1.1 percentage points. In December the airline carried a total of
2,019,585 passengers, 11.7 less than in the same month last year. At the same
time the airline reduced capacity by 10.15, in the context of the efficiency- increasing
program: “Shape and Size”. Viva airberlin – one to watch closely. Stay tuned.
Waves from the
Pacific
Etihad Airways named World’s Leading Airline at World Travel Awards
The
national airline of the United Arab Emirates has enjoyed stunning success at
the World Travel Awards, taking the
top honor for the third year in a row. The airline was named the World’s Leading Airline this week at a
gala event in Doha, Qatar. The judges also presented the
airline with awards for the World’s
Leading First Class and World’s Leading Airline to the Middle East. The three awards cap an extraordinary 12 months for the
airline. Highlights included the launch of seven new international routes, a
move into operating profitability and the purchase of 29.2% stake in airberlin, a landmark deal that enables access
to 33 million new passengers in Europe. Viva Etihad
Airways - congratulations to
management and employees. Stay tuned.
Hawaiian Airlines to create a Maui hub to expand operations
The airline
announced this week it is expanding its operations to create a Maui hub that will offer improved
connections between The Valley Isle and other points within the Hawaiian Islands as well as flights to and from
the West Coast. Hawaiian is increasing its daily neighbor
island schedule by an additional 23 to 25 flights over the next several weeks.
More than half of the added flights will serve the new Maui hub with one third providing
additional nonstop service between Maui and both Hawaii Island and Kauai. The new flights will be
supported by the three Boeing 717-200 aircraft it recently acquired. In
addition, Hawaiian is reintroducing
nonstop service to Maui from Los Angeles in June that will bring to five
the number of US mainland gateway that the airline is providing nonstop service
to Maui, along with Seattle, Las Vegas, Oakland and San Jose.
Mark Dunkerley,
president and CEO of the Hawaiian airline commented: “This investment in our core business here in Hawaii will increase
service between Maui and other neighbor islands by 25%, and answer a need expressed by our
kama’aina travelers. We appreciate the support of our
state lawmakers, the Department of Transportation, and Maui County in helping us to
move this project forward to the benefit of Hawaii’s air travelers.” Viva Hawaiian Airlines – way to go – stay tuned.
Singapore Airlines now operating
A380 to Frankfurt and New York
The A380
aircraft was launched this week, replacing the existing daily B747-400 service
and adding 25% more capacity on the route. The daily service operates between Singapore-Frankfurt-New York. Frankfurt and New York are Singapore Airlines ninth and tenth destinations to receive the superjumbo. Frankfurt is the airline’s fourth point in Europe to be added to the list, after London, Paris and Zurich, while New York is the second point in North America after Los Angeles. The world’s first carrier to
operate the
A380 in
October 2007, Singapore Airlines has
since carried more than six million customers on the superjumbo
system-wide. The airline currently has 15 A380s in service and four more on
firm order. Viva Singapore Airlines and the A380 – stay tuned.
ANA and Hawaiian Airlines launch code share and Frequent Flyer program
Japan’s leading carrier (ANA) and Hawaii’s leading carrier (Hawaiian Airlines) announced this week
they are expanding their existing marketing and operational partnership with
the signing of a code-share agreement for passenger flights within Japan and Hawaii.
Starting on January 19 ANA customers
will be able to book connecting flights on Hawaiian
Airlines between Honolulu and Kailua Lihue Hilo and Kahului through ANA. In addition Hawaiian Airlines will place its code on ANA operated flights between Tokyo’s Haneda International Airport and Honolulu, as well as flight s that connect
to Hawaiian’s own daily Haneda service from Chilose, Osaka and other destinations. The two
airlines also signed a joint Frequent Flyer Program on December
28, 2011.
Mark Dunkerley,
CEO of Hawaiian Airlines said: “This new agreement expands our relationship
with the leading airline of Japan and allows both carriers to offer travelers more choices and more
value than we could independently’. Viva ANA and Hawaiian Airlines – code
share and frequent flyer partnership is the way to go. Congratulations. Stay
tuned.
Waves from the Americas
Alaska Airlines is the winner of the Joseph S. Murphy industry award by ATW
Air
Transport World Magazine (ATW) named Alaska Airlines winner
of the coveted 2012 Joseph S. Murphy
Industry Service Award for outstanding public and community service. ATW’s airline achievement awards, which
recognize out standing performance, innovation and service in commercial
aviation, are among the longest running
and most prestigious in the industry.. Alaska
Airlines is the only North American carrier that ATW is honoring this year and the first
US airline to the magazine’s industry service award. Alaska Airlines President Brad Tilden stated; “We’re
honored and very proud to receive this award. In addition to recognizing our airline’s
commitment to serving our communities and our own initiative for supporting
worthy organizations, it also reflects directly our employees’ individual
dedication to giving back. So many of our employees volunteer in their
neighborhoods and we are proud that as part of corporate mission.” The 2012
awards will be presented February 13 in Singapore at the magazine’s annual
presentation gala. Air Transport World (ATW), is
the leading monthly magazine serving the airline and commercial aircraft
manufacturing and support industries. Its awards program was launched in 1974. ATW awarded Alaska Airlines the magazine’s Airline
Technology Leadership Award in 2003 and 2011. It also named it The Airline of the Year in 1990 and
recognized the carrier with its Financial
Management Award in 1989. Wow - Viva Alaska Airlines and thank you ATW magazine for the recognition. Stay
tuned.
LAN and TAM announce new profit estimate for LATAM Airlines group
The two
airlines announced a revised estimate of the synergies to be achieved through
the merger this week. The combined synergies
arising from the proposed combination could increase LATAM Group’s annual operating income
over time between $600 million and $700
million before depreciation and taxes, beginning four years after t he
completion of the transaction. This represents and increases of 50% to 75% over
the initial estimates of $400 million per year, which the airlines announced in
August 2010. The new estimates are based on work performed by the companies
together with consultants McKinsey &
Company and Bain & Company. Approximately
40% of the total potential synergies will be generated from increased passenger
revenue, 20% from the cargo business and t he remaining 40% will be generated
by cost savings. Viva LATAM – good luck
guys – one to watch – stay tuned.
Porter Airlines is arriving at
Washington Dulles International Airport
The
Canadian airline will arrive in Washington Dulles International Airport on
April 16,
and will be the airline’s sixth US destination with up to three daily round
trip fights operating between Dulles and Toronto City airport. Robert Deluce, CEO
of Porter Airlines, stated: “Greater Washington is a region that
our passengers have told us is their number one priority for new Porter service. We expect great
interest for both business and leisure trips and look forward to bringing
competition to the route.” Jack Porter, president and CEO of the
Metropolitan Washington Airports Authority said: “We are looking forward to welcoming Porter Airlines to our family of airlines providing extensive
international service to the Greater Washington Metropolitan Region. Porter will provide new convenient service to downtown Toronto and throughout Canada for our region. Dulles International Airport is the international
gateway not only to Washington but also to a significant part of the eastern seaboard, and this new air service from the leading Canadian
business destination will be a great addition.” Viva Porter Airlines
– another one to watch – stay tuned.
Copa Airlines plans to carry 10 million passengers in 2012
Pedro Heilbron,
CEO of the “model
airline” is optimistic about continued growth in 2012. He recently announced that the airline is adding between five and
seven new destinations and will be able to announce specifics about the
destinations and schedules beginning on January 25, with four new destinations.
He did state that Mexico and Brazil are the target markets as Panama negotiates expanding Open Skies
agreements with both countries. In 2011
the airline launched a total of nine new destinations – including flights to Canada and Paraguay. This year the airline plans to
take delivery of 10 new aircraft which will increase the fleet to 83 aircraft.
During the first half of 2012, Copa Airlines could
formalize its entry to the Star Alliance
which increases the potential for adding code share agreements with more
airlines, especially in Asia and Europe. Viva Copa Airlines and Pedro Heilbron
– way to go. Stay tuned.
Delta Air Lines and WestJet launch code share service
The new code share agreement to begin service on January 23, 2012. The agreement will provide code
sharing on flights within the United States and Canada, further expanding the
partnership between the two airlines. Under the first phase of the new
agreement, Delta will place its code
on WestJet flights to more than 15 cities, while WestJet code will be added to Delta flights on five markets,
expanding the networks of both carriers for customers flying between both
countries. Members of the Delta Air
Lines SkyMiles program and WestJet’s Frequent Guest Program will be able to earn miles or rewards on
the code share flights, providing customers another benefit of the enhance
relationship. Viva code sharing – way to
go with virtual alliances. Stay tuned.
Financial Waves
Bogota’s El Dorado Airport reports record
traffic in 2011
Bogota’s airport reports it handled 20.4
million passengers in 2011 – from 18.7 million in 2010, the highest record in
the history of the airport. Juan Pulido, General Manager of the airport administrator, OPAIN S.A. stated these numbers
positioned the airport a number 63 in passenger traffic worldwide,
and 31 in cargo traffic. He stated: “We have made some important adjustments to
the airport for both incoming and outgoing passengers that include new baggage
handling and waiting rooms for passengers which permits us to moderate outgoing
international passengers.” He also said the airport has coordinated with
government officials to emphasize cleanliness and security. Viva El Dorado Airport – stay tuned.
IAG reports it carried 10% more
traffic in December
The
International Airlines Group (IAG) – which is formed by British Airways and Iberia reported
it carried 3.68 million passengers in December for a 10% growth over the same
month last year. It also reported the group carried 51.68 million passengers in
2011, for a 2.1% increase year-over-year. It also reported RPM traffic increased 12.2% while ASM
capacity grew 11.5%. Business class travel in the year grew 13.6% with tourist
class growing 12%. On December
22 2011 IAG and Lufthansa reached an agreement for the group to acquire BMI for 207 million euros – the
acquisition is still subject to government approval... Viva IAG – way to go. Stay
tuned.
Lufthansa reports it carried a
record 106 million passengers in 2011
The Lufthansa airline with its affiliates Swiss International, Austrian Airlines,
British Midland and German Wings carried 106,335 million
passengers in 2011, for an increase of 7.5% year-over-year. Load factor dropped
2 points to 77.25; the airline transported 2.1 million tons of air cargo, a
4.8% increase year-over-year. Viva
Lufthansa, stay tuned.
Group AeroMexico
carried more than 14 million passengers in 2011
The
largest Mexican airline reported it carried one million 296 thousand passengers
in December, for a growth of 9% for the same month last year. Capacity (ASKs) recorded a 10% growth year-over-year in December
while demand (RPK’s) grew 11% to 78.1% for a 0.3
point growth. For the year 2011 the airline reported a record high figure of 14
million 334 thousand passengers transported for a 20% increase year-over-year.
The following chart summarizes the operating results for December and2011:
December YTD
December
2011 %chg 2011 %chg
RPKs (millions) 2,078 11% 22,635 21%
ASKs (millions) 2,663 10% 28,987 20%
Load Factor 78.1 -0.3 78.4 0.5
Passengers (000) 1,296 9.0% 14,334 20%
Viva Grupo
Aeromexico – way to go. Stay tuned.
Etihad Airways reports record passenger and cargo in 2011
The United Arab Emirates national airline carried a record
8.29 million passengers in 2011, a 17% increase year-over-year. Etihad Crystal Cargo – the airline’s
freighter service – also enjoyed spectacular growth in 2011, carrying a record
310,000 tons, for an 18% growth over the previous year. The airline’s CEO, James Hogan stated: “This result, achieved while much of the
world was still very much in the economic doldrums and oil prices remained
high, is testament to our emergence as a formidable force in the international
aviation arena. It also reflects our commitment to sensible, strategic expansion
which is why we launched eight new routes last year.” These were Bangalore, the Maldives, the Seychelles, Chengdu, Dusseldorf, Tripoli, Shanghai and Nairobi. The airline’s busiest route was Bangkok with the airline carrying more than
500,000 passengers to the Thai capital during 2011. Hogan also mentioned cargo: “In
cargo, the strongest growth was seen out of Europe as exports from markets such as Germany and Italy held firm during a challenging back half of the year. We launched freighter
services into Amsterdam, Cairo, Djibouti, Kabul and Kandahar during the year, increased operations to our key markets of China and India while growing Johannesburg by up to three freighters a week.” Viva Etihad Airways – one to watch – stay tuned.
Cargo Waves
AIRBRIDGECARGO Airlines adds Chengdu to its cargo network
AirbridgeCargo Airlines (ABC) has launched scheduled all cargo service to Chengdu
International Airport (CTU) operated by B747-400 freighter. The new service provides
the capital of Sichuan province in Western China to ABC’s existing route between Zhengzhou, Moscow and Amsterdam. The new schedule will operate
three times weekly connecting the cargo airline’s with many other online
network destinations in Europe. Viva AirBridge Cargo Airlines. Stay tuned.
World Airways has extended its
cooperation with Allied Air Cargo
The new
cooperation if for World Airways to
provide wetleased (ACMI) two MD11F aircraft beginning
this month to provide service between Europe and various cities in Africa. World Airways, a subsidiary of Global Aviation Holdings inc. began operating
aircraft for Allied Air in October
2008. Brian Bauer, Chief Commercial
Officer for Global Aviation holdings,
stated: “Allied Air Cargo and World
Airways have built up a strong commercial relationship over the last three
years and I am pleased that we are extending this cooperation with a multiple
year agreement. World Airways will
provide two MD-11 freighters to further serve the international needs of Allied and their business partners in Europe and Africa. Allied is a leading provider in these markets, and World is proud to be the airline of
choice for their wide body cargo capacity.’ Allied Air is a Nigerian all-cargo airline
operating four Boeing 727 freighters in addition to the two MD-11 freighters
leased from World Airways. Allied works
closely with its worldwide sales agent ANA Aviation Services, to provide scheduled flights and adhoc charter services. Allied Air carries more than 400 tons per week of fresh flowers and
vegetables from both Kenya and Uganda to the major European markets in Holland and the United Kingdom. World Airways, a subsidiary of Global
Aviation Holdings Inc, specializes in providing ACMI solutions using B747-400 and MD-11
aircraft. Viva World Airways and Global
Aviation Holdings – ACMI is the way to go. Stay tuned.
Tourism Waves
TACA has launched flights from Cusco to Puerto Maldonado & Arequipa
On January
1, 2012,
the “model airline” launched new flights between Cusco – Arequipa and Puerto Maldonado. The new
service is operated with new Embraer 1190 aircraft
and is based on increasing domestic service with an eye on leisure (tourism)
demand, not just in the new service, but connectivity offered by TACA throughout the Americas. Nani Guarres, the airline’s director of sales
in South America, stated: “Adding Puerto
Maldonado to the route network of the airline is not only based on the
development of corporate travelers but by providing access for more national
and international tourists to the Amazon destination which has natural ecological
beauties like the Nat ional Park of Manu, the National Reserve of Tambopata, the National Bahuaja Sonen Park, among many others.” Viva TACA – way to go- tourism is the driver. Stay
tuned.
Transportes Aereos de Guatemala (TAG) to launch Flores and Cancun service
The new
service will begin in June 2012 and is designed to promote tourism both
domestic and international. Flores is located in the department of Pelen
in northern Guatemala and will seek to bring more tourists
to visit the Tikal Mayan Archeological center which
was visited by 143,000 tourists in 2011, and the airline plans to reach 171,000
visitors in 2012 with the new service. TAG operates a fleet of 11 aircraft
and seven helicopters which serve the domestic market as well as regional
destinations in Central America. Viva TAG – one to watch – stay tuned.
Fuel Waves
by
Larry Weaver
For the
last several columns it appears that I have been emphasizing the economic
conditions of the world and the effect that this has on petroleum availability
and pricing. This week, I will attempt to turn that around and review where we
are currently and may be going in the future – especially with U.S. natural gas and Canadian oil
sands product.
The
conventional oil market is increasingly being pushed from two sides, so-called
“unconventional” oil, such as the Canadian tar sands and shale oil from the U.S. and by natural gas. These two are both threatening to set the
floor in pricing of crude, rather than OPEC or some other source of crude.
Due to
the break-through in drilling and production methods, the production of natural
gas has skyrocketed in the U.S. and, due to the low prices resulting from this
flood of gas, is moving into not only the U.S. but also the European markets.
Despite the fact that the U.S. coal reserves have more energy than all of OPEC
oil reserves together, the immediate availability of natural gas and the push
by environmentalists to clean up the environment, has caused the use of natural
gas in electrical power plants within the U.S. alone to increase some 7 percent
in 2008 and 2009 and it has increased approximately 50 percent since 2000. As
noted, natural gas is also being exported from the U.S. to the European market giving
competition to the gas coming out of Eastern Europe. This is having a deleterious
affect on the Russian economy due to their loss of markets for the natural gas
they are producing and/or transporting through their country and is even having
an effect on the crude pricing as the natural gas provides cleaner, cheaper
energy.
In
addition to the natural gas, within the next ten years Canadian oil sands
production is set to double, marking Canada as a leading source of marginal
oil. According to the "Canadian Energy Overview 2007" by National
Energy Board of Canada, Canada and Venezuela, each have oil sand reserves
approximately equal to the world's total reserves of conventional crude oil.
Although the Oil and Gas Journal downgraded its estimate of Canada’s total oil reserves from 178.1
billion barrels to 175.2 billion in 2010, it still remains third in the world
behind Venezuela and Saudi Arabia in the size of oil reserves, and
is the only non-OPEC member in the top five countries. Of this
175 billion barrels, 170 billion are found in the oil sands. With the
development of these oil sands, Canada has a growing share of the 53% of
global petroleum market which is produced by non-OPEC countries. Despite the
fields found off the coast of Brazil, this non-OPEC share of the
market has been, at best, standing still. As a result, the Canadian share of
the total non-OPEC production is expected to continue to grow. This larger
economic footprint is expected to give Canada larger importance in the
worldwide oil markets in the future. (As noted, Venezuela has a similarly large source of
this non-conventional oil but, due to their current economic difficulties, it
is not expected that their production of this marginal oil will increase
until/unless there are changes in the Venezuelan economic system.)
There are
a couple of other considerations that may affect this growth in Canada. As the environmental concerns
will help the expansion of natural gas into world markets, the concerns on oil
sands extraction could hinder its development. Even the Canadian Association of
Petroleum Producers (CAPP) concedes that oil sands extraction is generally held
to be more environmentally damaging than conventional crude oil. Different
environmental groups also say the social and health costs, pollution of the Athabasca River, air toxins, loss of farmland,
removal of Boreal Forest and the growth of greenhouse gas emissions are all
serious concerns that should warrant restricting the further development of the
Canadian oil sands.
Canadian
oil sands are set to have a greater role in the global energy mix, but whether
they will set the floor for world oil prices will depend on a variety of
factors. Amrita Sen, vice-president of commodities
research at Barclays Capital has noted that “Canada has managed to arrest a lot
of the decline [in production] rates in the conventional [oil] areas, which is
why oil sands are increasingly making a difference on a global scale. While
earlier oil sands production was simply replacing the depletion in the
conventional fields, now it is actually adding to global supplies. It’s one of
the biggest frontiers of unconventional oil.”
In its
annual 15-year outlook report released in July 2011, the CAPP forecast Canadian
oil production should grow from its 2010 production of 2.8 million barrels a
day (bpd) to 4.7 million bpd in 2025. Oil sands crude will provide the majority
of growth in Canada, CAPP estimates, with production
rising from 1.5 million bpd to 3.5 million bpd in 2025.
Canadian
oil sands supply currently amounts to approximately 6% of total non-OPEC supply
and is increasing at about 10% – 15% a year, according to Barclays Capital.
“Obviously its share is increasing very quickly but it’s not a Saudi Arabia,” says Sen. “But if it increases
at about 10% – 15%, we have it at 7% next year, and it could get up to 8% – 10%
in the next five years.”
Chris Feltin, senior analyst at Macquarie Capital in Calgary has noted that the oil sands
projects – which are very capital intensive - are subject to the vagaries of
the market. “The more projects get pursued at the same time, the more likely it
will start driving up costs and there’s a risk of reaching the point where the
economics don’t make sense anymore.” He
goes on to also predict that if market crude prices fall to around $70 per bbl,
the oil sands projects won't make sense.
Right
now, the U.S. is the destination for most of
the Canadian crude export. With the growing oil sands production, however, the
Canadians are looking to move product west through British Columbia where it
can be shipped to the growing China and other Asian markets. At present,
pricing for Canadian crude is somewhat tied to the WTI at Cushing, OK which is as far south as the
crude is able to be shipped. With the approval and completion of the Keystone
XL pipeline – which is expected by the end of the year, Canadian crude can make
it to the refining centers of South Texas. This, together with the exports to Asia through British Columbia will enable Canadian crude to
impact the world market. The expectation is that the influx of Canadian crude
into the Gulf Coast refining center will actually
cause the gap between WTI and Brent to close with the price of WTI climbing to
the world price levels and taking the Canadian crude pricing along with it.
Ultimately, however, the influx of this additional crude into the world market
will enable market forces to take control and could lessen the control
currently being exercised by Saudi Arabia and its OPEC friends on world
market pricing.
Larry Weaver is an Aviation Fuel
consultant headquartered in Tampa, Florida with over forty
years’ experience in aviation fuels. He is the founder and President of Dellem, LLC. Prior to starting Dellem,
he was employed in the Aviation Sales Department of Texaco Inc, and was Manager
of Texaco Aviation's Worldwide Operations. In this capacity he was responsible
for aviation fuel quality control and wrote the Texaco international Quality
Control Manual. He has provided training and consulting in quality control and
product handling to Petroleos de Venezuela, the
National Science Foundation and his expertise to various other private
companies. Dellem has provided worldwide Fuel
Acquisition and Management services to airlines for over thirty years and has
managed in excess of 25 million gallons of fuel per month for Dellem's clients. Contact: lweaver@dellem.com or
airwaves@avnewsinc.com Att: Larry Weaver
