Panic? Good idea.

On the doorstep of JAL’s pending pullout, Northwest Airlines is up against a possible strike, and, more ominously for the airline realm, fuel prices have gone through the roof, inspiring industry wonk Michael Boyd to issue the following dark decree: “Okay, panic is now acceptable behavior.”

Boyd is a sharp guy who I’ve been following for years, and if he says panic, then I’ll do just that.

Of the airline industry’s coming financial woes, Boyd states: “It’s the fuel, stupid.”

Yikes. I’ve been looking at my personal gasoline bills for the past two months, and I’m already panicking. Anybody selling a burro, by chance? I’m ready to saddle up.

I’m in the process of getting some airline fuel burn numbers so I can run some calculations, but, for now, judging from Boeing’s website, I surmise very (VERY) approximately that a fully loaded 747-400 will burn 18,627 gallons of fuel on a 3,000 nautical mile flight. Yeah, that’s longer than our Saipan to Japan flight, but you can’t interpolate this stuff, so I’m stuck with this rough figure for now, which at least gives us a feel for the raw magnitude of how big jets suck fuel and money.

Anyway, if fuel goes up by one dollar per gallon, you’d be looking, of course, at $18.6K in additional fuel costs for this theoretical flight. Yikes! That comes straight off the bottom line, straight out of profits.

One reason that you can’t interpolate fuel burns for various distances, by the way, is that when a jet starts out on a flight, it has to burn additional fuel just to propel the weight of the fuel itself. As the jet burns fuel, it gets lighter, and therefore burns less fuel to stay aloft. In fact, there are sophisticated calculations for “tankering” fuel, where airlines, faced with disparity in fuel prices at various airports, figure out if it is worth it to gas up at a cheaper place, and then to have to burn more fuel to haul that additional fuel around. In other words, the benefit of cheaper fuel can be outweighed by the cost of hauling it around, since more fuel means more weight, and more weight means higher fuel burn.

Whew. How’s that for a head-scratcher?

Jet fuel, by the way, is based on kerosene, which is not as refined as gasoline is, so jet fuel, per gallon, is cheaper than gasoline. On the other hand, small puddle jumper airplanes burn “aviation gasoline,” known as “avgas,” for short, which is generally 100 octane, and is far more expensive than automotive gasoline is.

I’ll tell you something else disconcerting about these terrifying fuel prices: Asia’s industrial economies, and hence our tourists, are going to get bled by this fuel shock. In fact, a classic squeeze is arriving: All else being equal, an increase in fuel prices will (a) reduce Asian demand for tourism, and will (b) also reduce the supply of airline seats. A contraction in demand and supply means a contraction in overall market activity. This doesn’t mean that Asian tourism will necessarily go down (though it might), it just means that it will be lower than it would have been had fuel costs stayed the same.

Still, that’s a bummer deal for the Commonwealth’s tourism sector, no matter how you slice it.

I suspect that the JAL affair is not going to be the only airline news that hits the Commonwealth. It may be soon, or it may be later, but we’re eventually going to see further reductions in jetliner service.

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Housekeeping note: An e-mail snafu means that, if you e-mailed me within the past four weeks or so, I may not have received your e-mail. This problem just came to my attention. If you’ve sent an e-mail and I didn’t respond, then please resend it.

Wisdom for the day: “Never use a big word when a diminutive one will suffice.”

(Ed Stephens, Jr. is an economist and columnist for the Saipan Tribune. Ed4Saipan@yahoo.com)