Optimal Fuel Hedging for Airlines

Some airlines are currently losing money because their fuel hedges have locked in higher prices as ticket prices fall.  I’m not sure they understand the difference between hedging and speculation.

http://www.economist.com/blogs/gulliver/2015/01/fuel-hedging-and-airlines

Does anyone know how much the fuel hedging teams at airlines talk to the pricing teams?

The problem is that airlines seem to think only about hedging expenses, not revenues.  They know they have all these future scheduled flights that will consume a certain amount of fuel.  So airlines talk about pre-purchasing all that fuel.  Or they buy a particular percentage of it and call it partial hedging.  Then when fuel prices fall, new carriers can enter the market at lower prices, reducing the revenue of airlines who have already locked in their expenses. Continue reading

Round Earth Theory of Evolution

I read this article http://theweek.com/articles/444891/should-stop-believing-evolution and noticed the arguments it makes are pretty weak.  It compares belief in evolution to belief in the color blue.  I’d say evolution is more like special relativity.  It’s non-intuitive and not obvious, but with enough effort it can probably be understood, analyzed, measured, observed. Continue reading

Buy Computers This Year

This year’s CES offers some exciting developments in computing.  But first, isn’t it odd that all these products are released just after Christmas?  Maybe it’s because Christmas is more about stores clearing shelves of unsold inventory at the end of the year.  Obligatory gifting customs lead people to buy discounted junk for others.  Stuff that they wouldn’t otherwise want for themselves.

I’ve held off new computer purchases for a long time, waiting for the 14nm chips from Intel.  They’re over a year late, which is understandable considering how amazing they are.  One can only imagine the internal dynamics at Intel, where the management and marketing team want to adhere to a long-term schedule of improvements while the scientists and engineers can only guess how long it will take to develop cutting-edge technology.

Here are the reasons I think 2015 is a good year to upgrade computers:

  • 14nm chips offer reduced power consumption, which means longer battery life, less heat, quieter fans or no fans.  It seems like it’s just another size in a long progression, …45, 32, 22, 14. But this time the performance change will feel like a breath of fresh air, the same way that 64-bit chips alleviated maximum RAM issues or SSD’s solved storage seek times.  And note that a 15W quad-core chip compared to a 45W dual-core chip is going to use even less than 1/3 the power to run a single thread because the power rating is for all the cores.
  • Screens are finally being marketed in terms of resolution.  I even saw a laptop screen quoted in megapixels.  I’ve always said monitors should be evaluated on megapixels and camera sensors on size.  Maybe we just had to max out practical screen sizes and camera sensor resolutions before shifting attention to the other factor.
  • vPro will make remote management of computers much easier.  With it, I can reinstall an OS at the office from across the ocean.
  • The AES-NI (Advanced Encryption Standard New Instructions) should reduce processor workload.  Even if you don’t encrypt all your data, you probably use https, VPN’s, WPA, or something else that uses AES encryption.
  • The Intel Compute Stick is fun.  Imagine the possibilities offered by a computer so small, low powered and inexpensive.  You could have a solar powered computer on your roof.  A computer in your car.  A computer attached to each TV (for people who still use TV’s!).  Sure, all that was possible before with the Raspberry Pi or by turning a smartphone into a PC, but that required effort.

Last year, a new laptop made little sense when compared to a 4 year old laptop.  With similar weight and processor performance, you would get a worse screen, better battery life, and better video performance.  It made more sense to buy a used laptop, throw in an SSD and clean the dust off its heat sinks.  I’m using a 6 year old Precision M6400 and my only complaints are weight and fan noise under heavy load.

I’m recommending the new Intel NUCs with Broadwell chips and the Dell XPS 13.  Personally, I’m going to hold off on a laptop upgrade until the 14nm chips make it into a Precision mobile workstation since I want two hard drives, more built-in ports, and a 15″ or 17″ screen (yeah, screen size also matters a bit).