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Southwest Hedges

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Is anyone at Southwest worried they have to start competiting on a level playing field, something they've been immune to these last few years?

I don't know about you but in the part of the US that I was raised in, nobody is guaranteed a "level playing field".

Want proof? Just ask the US Steel workers, the railroad employees, the Detroit Lions, or the laid off UAW workers in Flint MI. Ask how the "level playing field" worked for them.

Usually the company that competes the best is the one that shows the higest profits. When I'm running in a race, I don't slow down just so you can catch up.

In the history of Southwest Airlines, we have never played on the "level playing field" that you speak of...and hopefully we never will. And, just as your company shouldn't worry about SWA, I would also hope that all our efforts and energies here at SWA are directed towards taking care of SWA first...and then worrying about the others...

...over a beer at the Friday afternoon Deck Parties.
 
For what’s it worth, I believe last summer’s scare for oil will turn out to be a good thing in the long run for the industry. It forced an early hand for the airlines to seriously think and then take action about reducing capacity and protecting yield.

The airlines are way ahead of the curve this time around. Usually it’s the other way around when we’re adding tons of capacity and then having to stop midstream, turn the battleship around, and do the drastic cut and furlough all at one time; basically going from full afterburner to idle in one year.

The X factor will be how long the airlines can hold onto the fare increases of last summer. Once the loads start dropping off, the tendency will be to drastically cut prices. We shall see.

As usual, it will be an interesting next 12 months. Good luck to us all.

AA767AV8TOR
 
However the loads have been dropping and will drop, for everyone. While oil is dropping I think the BIG concern will be the passengers having MONEY to actually fly in this economic climate.

Good Luck to us ALL,

AAflyer


I havent seen many empty seats on any of the airline flights I have been on lately!!!
 
For what’s it worth, I believe last summer’s scare for oil will turn out to be a good thing in the long run for the industry. It forced an early hand for the airlines to seriously think and then take action about reducing capacity and protecting yield.

The airlines are way ahead of the curve this time around. Usually it’s the other way around when we’re adding tons of capacity and then having to stop midstream, turn the battleship around, and do the drastic cut and furlough all at one time; basically going from full afterburner to idle in one year.

The X factor will be how long the airlines can hold onto the fare increases of last summer. Once the loads start dropping off, the tendency will be to drastically cut prices. We shall see.

As usual, it will be an interesting next 12 months. Good luck to us all.

AA767AV8TOR

Hey, you forgot to blame it all on SWAPA.
 
Here is the latest fuel hedge stuff I could find.

http://in.reuters.com/article/governmentFilingsNews/idINN3039146220080804

FACTBOX-U.S. airlines' fuel hedging positions
Mon Aug 4, 2008 10:01pm IST

Aug 4 (Reuters) - U.S. airlines have hedged the price of
oil to protect themselves from rising fuel costs, but some may
end up losing money on hedges if the price of crude oil
continues to decline.

U.S. crude oil futures CLc1 traded around $120.50 per
barrel in New York on Friday, down from an all-time high over
$147 in mid-July. Jet fuel JET-USG was trading around $3.45
per gallon, down from an all time high just above $4.20 in
early July.

The following table shows airlines' fuel hedges as they
reported them alongside second-quarter results.

For full story, please double click on.

AIRLINE_____PERIOD_____PCT HEDGED_____PRICE

Continental Airlines_____H2 08_____63_____not disclosed
Continental Airlines_____H1 09_____29_____not disclosed

* United Airlines_____Q3 08_____44_____$100-$127/bbl
* United Airlines_____Q4 08_____47_____$99-$134/bbl
* United Airlines_____FY 09_____14_____$102-$152/bbl

American Airlines_____Q3 08_____35_____$95/bbl
American Airlines_____FY 08_____34_____$82/bbl

Northwest Airlines_____Q3 08_____63_____not disclosed
Northwest Airlines_____Q4 08_____56_____not disclosed
Northwest Airlines_____Q1 09_____21_____not disclosed

Southwest Airlines_____Q3 08_____80_____$61/bbl
Southwest Airlines_____Q4 08_____80_____$58/bbl
Southwest Airlines_____FY 09_____70_____$66/bbl
Southwest Airlines_____FY 10_____40_____$81/bbl

Delta Air Lines_____Q3 08_____48_____$2.94/gln of fuel
Delta Air Lines_____Q4 08_____46_____$3.42/gln of fuel
Delta Air Lines_____FY 09_____21_____$3.48/gln of fuel
Delta Air Lines_____FY 10_____5_____$3.05/gln of fuel

* US Airways_____Q3 08_____58_____$97/bbl
* US Airways_____Q4 08_____47_____$108/bbl

* Data includes fuel consumption for mainline operations
only. All others are for consolidated airline operations.
(Reporting by Kyle Peterson; Editing by Andre Grenon)
 

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