Alaska Air sees 3Q loss on hedges

[W5]

Alaska Air sees third-quarter loss on hedges

http://www.reuters.com/article/marketsN ... 007?rpc=44

Horizon Air in talks with Bombardier about Q400 deferrals

http://www.flightglobal.com/articles/20 ... rrals.html

[Gear Up]

A very well managed airline with stellar previous performance and a great employee-mangement relationship. I'm sure they'll pull through this in better shape then most.

GU

[Rebel]

Fuel hedges are dammed if you do and dammed if you don’t. Isn't SW hedged at over $100/barrel? That should make for an interesting quarter.

[Four1oh]

Fuel hedges are dammed if you do and dammed if you don’t. Isn't SW hedged at over $100/barrel? That should make for an interesting quarter.

Do you mean WS as in WJA, or SW as in LUV? Or none of the above?

[Rebel]

Southwest Airlines Co
SW
From Wikipedia, the free encyclopedia

Look up SW, sw in Wiktionary, may stand for:

Southwest Airlines, a U.S. airline

[yyz monkey]

IATA-Code: WN
ICAO-Code: SWA
Prefix-Code:
Airline: Southwest Airlines
Country: United States
Callsign: Southwest
Website: http://www.southwest.com/

http://www.airlinecodes.co.uk/airlcodesearch.asp

[Four1oh]

ok now that I know who you're talking about, I think that the majority of Southwest's hedges are well under $100/barrel until the end of the year, but I can't remember where I read that.

[Rebel]

Everyone knows SW stands for SWA but may not know LUV is the NYSE symbol for SW and not widely used on aviation forums whatever.

[Four1oh]

whatever.

well said.

[CanadaEH]

I don't know what SW is hedged at today but 2 years ago they were hedged at $38bbl and each year since and forward that hedge is rising. They've saved $3.9B in the past 3 years on the fuel hedge.

[Tim Tam]

This article is about Alaska?

We should move the hedge talk to the Westjet/WS/WJ/WJA or whatever...

35% OF Q3 oil at $136 wasn't it?

Just sayin'......Our profit share will be affected.

[Rebel]

According to SWA 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.

The truth is that Southwest STILL has what is probably the best fuel hedges for 2007 and 2008, but after that the relative advantages to the legacy and discount air carriers comes down drastically.

[tsgas]

There is nothing stopping LUV from adding to there fuel hedging position now that crude is on sale BIG TIME!.

[Rebel]

Ah I don’t think that oil is at fire sale prices it has a long way to go. Unfortunately for SW this time around the other players are very aware of the hedging advantage that SW enjoyed and will do like-wise. Besides I don’t believe oil traders will allow themselves to be caught out this time. Once burnt twice shy.

Southwest Airlines falls to first quarterly loss in 17 years. Southwest Airlines Co. posted its first net loss in 17 years as it had to write down the value of its fabled fuel-hedging transactions. Southwest says it lost $120 million, or 16 cents per share. A year earlier it had net income of $162 million, or 22 cents per share. The company took $247 million in charges, mostly to write down fuel-hedging deals that are less valuable when oil prices fall, as they have in recent weeks.



Without the charges, Southwest says it had an operating profit of nine cents per share. Analysts, who typically exclude items, expected Southwest to earn seven cents per share, according to a survey by Thomson Reuters. Revenue rose 12 per cent to $2.89 billion. Analysts had predicted $2.83 billion. (Source: The Associated Press)