canyonblue
Everyone loves Southwest
- Joined
- Nov 26, 2001
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Southwest Hedges Could Once Again Prove Beneficial
Nov 2, 2007
Lori Ranson
Southwest's hedging strategy could once again provide a significant upside to the carrier as fuel hovers in the $90-per-barrel range.
The airline's aggressive hedging allowed it to preserve operating profits of $2.8 billion from April 1, 2003, to March 31, 2007, with $2.2 billion of that amount attributed to hedging (DAILY, May 21).
Briefly in January, oil closed at below $50 per barrel, triggering little advantage for the roughly $50 cap Southwest had in hedges heading into 2007.
Earlier this week, oil cost $90.38 per barrel.
Southwest has hedges in place for the remainder of the year at about $51 per barrel and has refinery margin contracts on most of the positions, the carrier explained in a regulatory filing. Next year, Southwest is 70% hedged at $51 per barrel.
Nov 2, 2007
Lori Ranson
Southwest's hedging strategy could once again provide a significant upside to the carrier as fuel hovers in the $90-per-barrel range.
The airline's aggressive hedging allowed it to preserve operating profits of $2.8 billion from April 1, 2003, to March 31, 2007, with $2.2 billion of that amount attributed to hedging (DAILY, May 21).
Briefly in January, oil closed at below $50 per barrel, triggering little advantage for the roughly $50 cap Southwest had in hedges heading into 2007.
Earlier this week, oil cost $90.38 per barrel.
Southwest has hedges in place for the remainder of the year at about $51 per barrel and has refinery margin contracts on most of the positions, the carrier explained in a regulatory filing. Next year, Southwest is 70% hedged at $51 per barrel.
TC
