Fuel And Hedges...

[Crzipilot]

Just curious, thought I saw somewhere AWA was hedged somewhat prior to the merger. With the merger and such, do they still have the hedges in place and how much?

 

[dc3fanatic]

When a company talks about hedge, it says x% of capacity is hedged. In actuality, they have (say) 5,000 barrels hedged at $30 / barrel. All extra usage is at market price.

So, America West would retain their hedges on their barrels, but the % would go down because they have added the US Airways fleet for capacity.

Their cost per gallon will go up based sheerly on usage of non-hedged fuel, even if fuel price remains static.

That is why Southwest's INCREMENTAL cost of additional flying shouldn't include hedged fuel as part of the calculation, it should be market fuel.

 

[airportman]

see below

 

[Crzipilot]

Ya I understand how the % would go down, guess I'm wondering what the % stands now at the combined airline,

 

[airportman]

Ya I understand how the % would go down, guess I'm wondering what the % stands now at the combined airline,

[post="307386"][/post]​

i hope this link works page 6 shows it all

http://www.airlines.org/news/files/Airlines_Fuel.pdf