luv2fly
SWA FO
- Joined
- Feb 12, 2002
- Posts
- 204
It doesn't matter if the hedges are running out. The revenue is not meeting the costs. The hedges are just temporarily covering the losses.
The 3rd quarter would have looked like a MINUS $27M loss without the hedges. Operationally the airline is operating at a loss.
SWA only profit center is it's secondary business the Fuel Office which hasn't closed it doors YET! I thought SWA was an airline.
Our hedging program has been around for over 20 years. If you knew anything about them you would no that they don't "run out". They are traded on a daily basis using normal option methods (puts and calls), so they are actually not ever sold. They only way we could "run out" is if we start selling the options out right.
Now, we are still maintaining our hedging program, but our price equivalent to jet fuel is going up. So the hedge gains will not offset the increased cost of fuel as much.
We were hedging before 9-11, why not the same attention then as now. Why don't you go back for 20 years and subtract out our "hedge profit" from all of quarterly profit to find our "real" profit. Why you are at it subtract out the liquor sales, money saved due to efficient scheduling of pilot/FA/aircraft, fuel saved from efficient profiles...etc.