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A Southwest 737-700 at San Diego International Airport (Photo: AirlineGeeks | Greg Linton)

Part Two: Fuel Hedging in the Airline Industry

While the previous post served as an introduction to the various types of fuel hedging methods, this post will focus on several real world examples of fuel hedging done right and wrong throughout the airline industry. As mentioned previously fuel hedging is the strategy that airlines use to control their fuel costs in a market where fuel prices can be quite volatile. Many airlines hedge fuel and many airlines don’t. Doug Parker, currently CEO of American Airlines, stopped the fuel…

Part One: An Introduction to Airline Fuel Hedging

While news organizations often announce airlines' financial results, it quickly becomes difficult to further dissect and understand the major cost drivers, particularly related to fuel. This is the first part of a two-part series explaining the basics of fuel hedging and how it impacts airlines around the world. The first…