SWA posts profit

[Falconjet]

800Dog: 34 years of profits allows you to gather CASH, which is almost as good as money, giving you the ability to buy fuel hedges at MARKET rates. When you continue to make money, buy airplanes with cash, and have a stellar credit rating, you can use these hedges as a way to fix your future costs for fuel.

YOUR airline would do it too if it had the money or decent enough credit to purchase the hedges. Every airline should be doing it, but most of them are too busy going into and out of bankruptcy, killing employee retirement funds, and basically running the company into the ground to take the time to figure it out.

Makes you wonder how in the world they get paid the big bucks. Also makes you wonder how you don't understand all of this.

FJ

 

[800Dog]

800Dog: 34 years of profits allows you to gather CASH, which is almost as good as money, giving you the ability to buy fuel hedges at MARKET rates. When you continue to make money, buy airplanes with cash, and have a stellar credit rating, you can use these hedges as a way to fix your future costs for fuel.

YOUR airline would do it too if it had the money or decent enough credit to purchase the hedges. Every airline should be doing it, but most of them are too busy going into and out of bankruptcy, killing employee retirement funds, and basically running the company into the ground to take the time to figure it out.

Makes you wonder how in the world they get paid the big bucks. Also makes you wonder how you don't understand all of this.

FJ

I understand fuel hedges sport. Read my posts. My question has yet to be answered. What is LUVs plan going forward? Hedges? New sources of revenue? Acquisitions? Status quo? What an uninformative message board. Its no wonder why so many think pilots are a#######!

 

[Big Beer Belly]

What is LUVs plan going forward? Hedges?

Googled this (info about 8 mos old):

<<
Its forward fuel hedges are dwindling, which means this gets to visit the same barrel session as the other airlines on fuel costs. In 2005 they were sitting pretty with an average cost per gallon of only $1.03, but we are almost in the middle of 2007 and those hedges could only be purchased for so long into the future. Its 2006 total fuel costs rose 48.5% to $1.53 because so many hedges ratcheted higher. According to its last annual report here is the company's fuel hedge for forward years ("approximate" per barrel basis, as of mid-January):


2007 is 95% hedged at $50/barrel;
2008 is 65% hedged at $49/barrel;
2009 is over 50% hedged at $51/barrel;
2010 is over 25% hedged at $63/barrel;
2010 is over is 15% hedged at $64/barrel;
2012 is 15% hedged at $63/barrel.
>>

 

[GuppyWN]

Dog,

WN has always and will always buy hedges. By buying fuel hedges you not only insulate yourself to increasing fuel costs but you also can plan with more certainty what your expenses will be YEARS in the future.

The news not mentioned here is that our 2007 earnings were over $650 MILLION - an all time high. We are in a very good financial position going forward.

Thanks Gary for another great year!

Gup

 

[Falconjet]

Hopefully LUV will keep making money and the pilots will get raises etc. If LUV paid market rates for fuel, would they have made a profit? When do their hedges run out and are they trying to hedge for the future? Thanks.

Sure doesn't sound like it, "sport".

FJ

 

[Whataburger]

Laura Wright. 4Q transcript.

Looking forward to the first quarter of 2008, we have derivative contracts on approximately 75% of our estimated consumption at an average crude equivalent price of $51 a barrel and we have converted the majority of our crude oil positions to refined products.
Based on this hedge position and current market prices, we do not expect the same amount of hedging gains in the first quarter that we had in the fourth quarter of ‘07. As a result we currently expect our first quarter ‘08 economic fuel price to approximate $2 per gallon.
Our premiums associated with the cost of our hedging program were in the same range as last year’s $16 million and this is recorded in other gains and losses. We expect similar premium costs in the first quarter of 2008.
The estimated fair value of our hedge contracts related to future periods was $2.4 billion at December 31 and looking forward, our hedging position is as follows: in 2008 we are over 70% hedged at approximately $51 a barrel; in 2009 we’re over 55% hedged at approximately $51.00 a barrel; 2010 is nearly 30% hedged at $63.00 a barrel and 2011 and 2012 are over 15% hedged at approximately $64 and $63 respectively.