Alaska and Southwest did what many considered to be the prudent thing and hedged a lot of their fuel purchases, but they are now paying higher prices than airlines that didn't hedge. That's how hedging goes, but it's often better to be safe than sorry.
Fuel hedging hasn’t translated into lower jet fuel prices for some of the biggest U.S. airlines, even after crude oil rose 17 percent in the fourth quarter.
American Airlines Group Inc., United Continental Holdings Inc. and Delta Air Lines Inc., three airlines that stopped fuel hedging, will pay the least for fuel this quarter, according to company projections.
Alaska Air Group Inc. and Southwest Airlines Co. have hedged the highest portion of their fuel and yet will pay the highest and third-highest prices, respectively. The one exception is JetBlue Airways Corp., which stopped hedging this quarter but expects to pay the second-highest price.
©2018 Bloomberg L.P.
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Photo credit: Southwest CEO Gary Kelly in the aisle of a Boeing 737 Max 8, which the airline debuted in October 2017. Ashlee Duncan Smith / Southwest Airlines