$675 million

By my reckoning that’s roughly how much Air Canada has saved in fuel costs since oil started it’s downward spiral a couple of weeks ago. Last month when crude was marching higher, and the airline sought to justify its decision to layoff 2,000 workers and cut capacity, the company said every one dollar increase in the price of oil added $26 million to its fuel bill. At the time the company estimated its fuel bill would be an extra $1 billion in 2008.

Only now, the price of oil is falling. It’s at $121.30 a barrel today, down from a peak of $147.27 earlier this month. Assuming the $26 million figure still applies, that’s a saving of $675,220,000. Don’t expect any cheering in the Air Canada boardroom. Oil prices are still at stratospheric levels compared to where they were even a year ago, and the economics of running an airline will still be grueling even if oil falls another $25. But I wouldn’t be surprised if the recent fuel savings come up in the face of this, this and this.