Southwest, long an airline rebel, stands alone on hedging strategy
Once again, Southwest Airlines is going it alone. The only one of the 4 major airlines without bag fees is also the only one that is aggressively pursuing a hedging strategy -- one more indication that in its 45-year history, Southwest has never been an airline that follows the pack. CE Gary Kelly said Southwest's strategy has been consistent. "If we can have 50% of consumption hedged by the start of the year, that's a rule of thumb for us," he said. "We've had very successful hedging over 25 years," Kelly said. "We like to have protection if {prices rise}. If prices go down, we will be fine." Notably, in 2008 Southwest reported a US$1.3b hedging gain, although more recently it has been losing money. As of July 18, the carrier said the fair market value of its fuel hedges for the second half of 2016 was a net liability of $545m. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2016-09-21/unaligned/southwest-long-an-airline-rebel-stands-alone-on-hedging-strategy
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Southwest, long an airline rebel, stands alone on hedging strategy
Once again, Southwest Airlines is going it alone. The only one of the 4 major airlines without bag fees is also the only one that is aggressively pursuing a hedging strategy -- one more indication that in its 45-year history, Southwest has never been an airline that follows the pack. CE Gary Kelly said Southwest's strategy has been consistent. "If we can have 50% of consumption hedged by the start of the year, that's a rule of thumb for us," he said. "We've had very successful hedging over 25 years," Kelly said. "We like to have protection if {prices rise}. If prices go down, we will be fine." Notably, in 2008 Southwest reported a US$1.3b hedging gain, although more recently it has been losing money. As of July 18, the carrier said the fair market value of its fuel hedges for the second half of 2016 was a net liability of $545m. <br/>
