Originally Posted by
sbm12
I am curious how many of the 69 quarters of profit were as a result of similar mark to market accounting gains in their fuel hedge positions versus operational profits. In other words, had they not been hedged, would they have been profitable in all those quarters? I have to believe that the answer is no, but this time they got caught on the wrong side of the hedge so they're deflecting the focus from those numbers. I don't know it for certain, but it seems that way to me.
While it's great if it works, I don't think luck with fuel hedging translates to good business. I think it translates to good luck. Hedging is nothing more than glorified gambling of a commodity and Southwest had an incredible long run with good luck. And good for them --Im glad they were able to keep their fuel prices in check for so long.
But something is awry with the industry if you need a major element of gambling on your #1 expense to maintain profitability.