We keep a really close eye on oil. When there's an oil shock, airlines start losing money and pull back service and raise fares. The refining of jet fuel has been high for a while. I hope it starts to settle back down with the change of administration in the U.S.
We'll hedge when oil goes below $50 a barrel, which it hasn't been for a while. It's just too volatile. More energy-friendly policies should help. The outlook, I think, is good.
Obviously, there are going to be geopolitical flare-ups around the world, but hopefully we're headed to a more peaceful time. Internationally, I'm most focused on Brazil and Azul. What really affects us down there is the exchange rate -- the strengthening dollar, the weakening real. It's tough enough being in business there, and the fluctuation in currency makes it more challenging. But Brazilians love to travel. Given the opportunity to go to Europe or the United States, they'll take it every time.
Focusing on the U.S., there's Spirit's bankruptcy. I really think that's kind of a cleanup for a merger with Frontier. Or, they could go it on their own; they're making a valiant effort to raise enough money to sustain themselves.
If you look at JetBlue, Southwest, Frontier, Spirit, they've all got to make some changes and adapt their models to compete with the big guys. And that's hard because so much of the revenue for the big guys is from their credit cards. Billions and billions of dollars.
And the big guys carved out 30 or 40 seats for basic economy, and those seats cost them less than Spirit because they're incremental seats. Basic economy was targeted directly at the ultralow-cost carriers.
Breeze is really well positioned because we've got, by far, the lowest trip costs; that is, the cost to fly from A to B.
So, we can fly into destinations others can't. For example, if there's just enough revenue on a route to collect $16,000, and I can do a trip for $15,000 but it costs a competitor $20,000, then we make $1,000 and they lose $4,000.
Everyone's trying to figure it out. Delta is doing more bundling. United is going into secondary or tertiary international markets that people hadn't thought of before.
But the best way is to be in markets where you don't have competition. That's about 90% of our routes. And in 12 of our 66 cities, we fly to more destinations than any other airline.
We're looking at flying internationally. We could do a seven-hour flight from Florida or the Northeast. We could fly to Central and South America, to the Hawaiian Islands. We could get to Ireland and the British Isles. But probably not farther.
This interview was conducted by Arnie Weissmann.