Southwest Turns a Profit
Oct 15th, 2004 | By Jared BlankDespite the miserable economic climate for airlines, Southwest turned a profit last quarter, primarily due to their extremely impressive fuel hedging scheme. (If you are wondering what fuel hedging is, basically they pay in advance for fuel at what the airline hopes is lower future prices. It’s basically saying I’ll gladly pay you today for a hamburger on Tuesday.) With fuel prices above $50 a barrel, Southwest is paying $25 or less for 80% of their fuel. Impressive.