fuel hedging is a factor for one simple reason
"No one knows where oil prices will be in six months, let alone 10 years away,"
What is Parker to do
- Taking out complex call options or even buying a refinery are some of the measures airlines should consider as they try to combat volatile oil prices
"Oil prices are one of the biggest risk factors in the business."
"Airlines are very good at mitigating risk across the business but managing commodity price risk is often an area where they fall short,"
However, some airlines, badly burned from hedging losses in volatile oil markets, have scaled back hedging activities and more may follow.
US Airways, which stopped hedging, is in the process of a merger with American Airlines, leading some to question what American's future hedging strategy will be.
"The U.S. industry right now is interesting," United's Laderman said, pointing to American. "Are they now going to stop hedging?"
Parker is not going to hedge untill synergy is complete
~ FNMA ~
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