Fuel hedging US airlines get burned again
Oil glut and depressed prices result in hedged airlines doling out cash to parties on the other side of the bets
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AT least two US airlines have started hedging their fuel costs after a months-long hiatus. The early result: more losses.
Southwest Airlines Co and United Continental Holdings Inc have added new hedges against a rise in oil prices just months after bets last year cost them hundreds of millions of dollars. With US crude prices falling 21 per cent since early June, Southwest appeared to regret the decision. "We were concerned that market prices would continue to escalate, so we did add some positions for the second half of this year," Southwest's chief financial officer Tammy Romo said on an investor call on Thursday.
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