Lastest Hedging Numbers

[ASA_DFW]

Looks like Southwest is still leading the hedging game.




NEW YORK, Oct 26 (Reuters) - U.S. airlines have hedged their expected jet
fuel purchases to protect themselves from rising fuel costs. A hedge typically involve buying a financial contract in a related product
such as crude oil (CLc1: Quote, Profile, Research) or heating oil (HOV7: Quote, Profile, Research). The financial gains from those
contracts, when the price rises, can help offset higher costs for jet fuel,
which vies with labor as an airline's largest expense. Other hedging strategies include so-called "collars," which are
combinations of put and call options. They generally cost less to put in place
and limit the risk when prices rise, but they also limit gains when prices
fall. Below is a table outlining the hedging positions at major airlines,
arranged by size (For story, please double click on [nN26359221check]): PERCENT
AIRLINE PERIOD HEDGED DESCRIPTION
American Airlines Q4 07 40 capped at about $69/barrel crude oil;
(AMR.N: Quote, Profile, Research) Q4 fuel cost forecast $2.27/gallon FY 08 14 no figures provided
United Airlines Q4 07 18 heating oil collars: upside protection
(UAUA.O: Quote, Profile, Research) starting at $2.04/gallon and capped at $2.22/gallon; payment obligations start if heating oil drops below $1.86/gallon; Q4 fuel cost forecast $2.50/gallon
Delta Air Lines Q4 07 20 heating oil collars with avg cap of
(DAL.N: Quote, Profile, Research) $2.35/gallon; Q4 fuel cost forecast $2.36/gallon
Continental Airlines Q4 07 30 heating oil collars: avg put price
(CAL.N: Quote, Profile, Research) $2.05/gallon, avg call price $2.22/gallon; Q4 fuel cost forecast $2.35/gallon Q1 08 10 heating oil collars: avg put price $2.08/gallon, avg call price $2.25/gallon
Northwest Airlines* H2 07 25 crude oil collars: put options
(NWA.N: Quote, Profile, Research) $53-55.95/barrel; call options $72/barrel 10 crude oil swaps: $62-$64.98/barrel
Southwest Airlines Q4 07 90 at avg crude oil-equivalent price of
(LUV.N: Quote, Profile, Research) $51/barrel; Q4 fuel cost forecast $1.80/gallon FY 08 70 at avg crude oil-equivalent price of $51/barrel FY 09 55 at avg crude oil-equivalent price of $51/barrel FY 10 25 at avg crude oil-equivalent price of $63/barrel FY 11 15 at avg crude oil-equivalent price of $64/barrel FY 12 15 at avg crude oil-equivalent price of $63/barrel
US Airways Group Q4 07 56 heating oil collars: weighted avg
(LCC.N: Quote, Profile, Research) range $1.85 to $2.05/gallon; Q4 fuel cost forecast $2.28-2.33/gallon
SOURCE: Airline filings. *Northwest Airlines has not yet provided updated data on its hedging
position. These figures are from August and reflect its hedging position as of
end-June.

 

[GuppyWN]

The Generals computer must be down.

Gup

 

[BobbyB]

Hey! That's not fair! WN's hedges are supposed to run out and then the company can go bankrupt/lose money/raise fares/cut pay/(insert grim WN prediction here)!!!!

It is nice that we still have the tons of cash it takes to keep the hedge program running on all cylinders...$1.80~ish a gallon...nice.

 

[Ex737Driver]

Hey! That's not fair! WN's hedges are supposed to run out and then the company can go bankrupt/lose money/raise fares/cut pay/(insert grim WN prediction here)!!!!

It is nice that we still have the tons of cash it takes to keep the hedge program running on all cylinders...$1.80~ish a gallon...nice.

They are and fares are being raised. I don't see any other grim prediction other than SWA has some losing quarters next year and in subsequent years as will most carriers if oil remains in it's current direction. They will still have more than adequete cash reserves, a work force willing to provide the utmost in productivity, and the availability of funding sources to maintain their current status quo.

 

[General Lee]

The Generals computer must be down.

Gup

Nope, and thanks to everyone raising fares $10 roundtrip, not having as many hedges doesn't matter as much. But hey, if it helps your bottom line thanks to not having higher yield INTL routes, then good for ya. I guess you have to do something to help this essentially flat domestic market. Regardless, I am sure you will continue to post quarterly profits into the next millenium, and continue with your multiple leg days and 25 min turns. So, have fun in Sacramento (twice tomorrow) and eventually ELP later in the day.

Bye Bye--General Lee

 

[Jmoney]

Nice..

Nope, and thanks to everyone raising fares $10 roundtrip, not having as many hedges doesn't matter as much. But hey, if it helps your bottom line thanks to not having higher yield INTL routes, then good for ya. I guess you have to do something to help this essentially flat domestic market. Regardless, I am sure you will continue to post quarterly profits into the next millenium, and continue with your multiple leg days and 25 min turns. So, have fun in Sacramento (twice tomorrow) and eventually ELP later in the day.

Bye Bye--General Lee

If that is what it takes to stay out of bankruptcy, you numbnut. Sounds like Southwest has little room for criticism from a company that lost umpteen billion before finally getting everyone to forget about it using bankruptcy court. Excellent management-excellent use of the airline bailout tax money. Excellent position to be throwing stones at SWA-moron!

DAL could literally take a steaming dump on your forehead, and you would find some idiotic rationalization for why that is a good thing.
Let me guess: recycle, reuse-don't waste poop.... We'll see if these Euopean routes are good in the long run, or just a really good laxative.

 

[General Lee]

If that is what it takes to stay out of bankruptcy, you numbnut. Sounds like Southwest has little room for criticism from a company that lost umpteen billion before finally getting everyone to forget about it using bankruptcy court. Excellent management-excellent use of the airline bailout tax money. Excellent position to be throwing stones at SWA-moron!

DAL could literally take a steaming dump on your forehead, and you would find some idiotic rationalization for why that is a good thing.
Let me guess: recycle, reuse-don't waste poop.... We'll see if these Euopean routes are good in the long run, or just a really good laxative.

Say what? You sound like an idiot. What is your experience again? Tell your dad to enforce the computer rules after 10pm. Now go pop some zits on your teenage face. You have NO clue what you are talking about---especially about our European routes being good in the long run? Those are our best performing routes. But you knew that.....IDIOT. You are a waste of time.

Bye Bye--General Lee

 

[9rj9]

Spin it gennylee

Suit Says Delta Stiffed Creditors
Friday October 26, 5:42 pm ET Suit Alleges Delta Air Lines Cheated Creditors to Prep Comair for Sale

WASHINGTON (AP) -- Five Wall Street investment firms have accused Delta Air Lines Inc. of cheating creditors of its regional subsidiary, Comair Inc., to increase the price it could collect if Comair were sold.

In a lawsuit filed with the U.S. Bankruptcy Court in Manhattan, the firms said Delta deliberately inflated estimates of payments Comair creditors would receive in the airlines' bankruptcy reorganization. Once the airlines exited bankruptcy, however, Delta reduced the estimate by about 25 percent.
Delta "had a clear intent in providing an overly optimistic view of the recoveries" for Comair creditors, the lawsuit said. Approval of Comair's bankruptcy-reorganization plan was obtained "by fraud," the suit said. It asked a judge to revoke his approval of the plan.
The lawsuit was filed by affiliates of two investment banks -- Bear Stearns Cos. and Societe Generale -- and several hedge funds, including Varde Investment Partners, Cypress Management Master LP and Par-Four Master Fund. The firms say they hold $125 million in bankruptcy claims against Comair.
Anthony Black, a spokesman for Delta in Atlanta, wasn't available for comment Friday.
Comair's reorganization plan promised its creditors a 6.8 percent share of new Delta stock that was issued after Delta exited bankruptcy in May. But the exact distribution depends on the amount of bankruptcy claims allowed against Delta and Comair. If claims against Comair were higher than expected, Comair creditors would get less.
Comair's Chapter 11 plan estimated the regional airline would allow no more than $800 million in claims. That would mean Comair creditors would recover about 91 cents for every dollar they're owed.
But just six weeks after Comair exited bankruptcy in May, Delta's chief financial officer announced that Comair claims would total $1.05 billion. That meant Comair creditors would get just 69 cents for every dollar.

In February, Comair granted an $82.5 million unsecured claim against it to the Air Line Pilots Association in return for a wage-and-benefit-cuts agreement from the union. It also granted a claim of more than $100 million to a group of aircraft financiers led by Merrill Lynch & Co., according to the suit.
Those agreements "materially altered" the amount of claims against Comair, but the airline didn't disclose that, the lawsuit said. In March, Delta filed a statement with the Securities and Exchange Commission estimating the amount of Comair claims at $800 million That statement, the lawsuit said, was "false at the time."
Delta's intent was to pump up the potential value of Comair in a prospective sale, according to the lawsuit. The company's CFO, Edward Bastian, said in March that Delta was considering "spinning off certain assets, such as Comair."
The Wall Street investment firms have been fighting Comair and Delta since July.

So you think this management will actually give you the 2% rasie you think your going to get. Better load up on sun chips.

 

[FlyinGuy]

Sounds like Delta is taking pages out of the New England Patriots play book!!!

 

[General Lee]

Suit Says Delta Stiffed Creditors
Friday October 26, 5:42 pm ET Suit Alleges Delta Air Lines Cheated Creditors to Prep Comair for Sale

WASHINGTON (AP) -- Five Wall Street investment firms have accused Delta Air Lines Inc. of cheating creditors of its regional subsidiary, Comair Inc., to increase the price it could collect if Comair were sold.

In a lawsuit filed with the U.S. Bankruptcy Court in Manhattan, the firms said Delta deliberately inflated estimates of payments Comair creditors would receive in the airlines' bankruptcy reorganization. Once the airlines exited bankruptcy, however, Delta reduced the estimate by about 25 percent.
Delta "had a clear intent in providing an overly optimistic view of the recoveries" for Comair creditors, the lawsuit said. Approval of Comair's bankruptcy-reorganization plan was obtained "by fraud," the suit said. It asked a judge to revoke his approval of the plan.
The lawsuit was filed by affiliates of two investment banks -- Bear Stearns Cos. and Societe Generale -- and several hedge funds, including Varde Investment Partners, Cypress Management Master LP and Par-Four Master Fund. The firms say they hold $125 million in bankruptcy claims against Comair.
Anthony Black, a spokesman for Delta in Atlanta, wasn't available for comment Friday.
Comair's reorganization plan promised its creditors a 6.8 percent share of new Delta stock that was issued after Delta exited bankruptcy in May. But the exact distribution depends on the amount of bankruptcy claims allowed against Delta and Comair. If claims against Comair were higher than expected, Comair creditors would get less.
Comair's Chapter 11 plan estimated the regional airline would allow no more than $800 million in claims. That would mean Comair creditors would recover about 91 cents for every dollar they're owed.
But just six weeks after Comair exited bankruptcy in May, Delta's chief financial officer announced that Comair claims would total $1.05 billion. That meant Comair creditors would get just 69 cents for every dollar.

In February, Comair granted an $82.5 million unsecured claim against it to the Air Line Pilots Association in return for a wage-and-benefit-cuts agreement from the union. It also granted a claim of more than $100 million to a group of aircraft financiers led by Merrill Lynch & Co., according to the suit.
Those agreements "materially altered" the amount of claims against Comair, but the airline didn't disclose that, the lawsuit said. In March, Delta filed a statement with the Securities and Exchange Commission estimating the amount of Comair claims at $800 million That statement, the lawsuit said, was "false at the time."
Delta's intent was to pump up the potential value of Comair in a prospective sale, according to the lawsuit. The company's CFO, Edward Bastian, said in March that Delta was considering "spinning off certain assets, such as Comair."
The Wall Street investment firms have been fighting Comair and Delta since July.

So you think this management will actually give you the 2% rasie you think your going to get. Better load up on sun chips.

You better believe it. We automatically get a 1.5% raise regardless, and the other numbers support a bit more. So, 2% doesn't look out of the question, and maybe more depending on the final numbers. Also, suits like this are probably common place during BKs, and we have lawyers to cover that. I am soooo glad UPS never does ANYTHING shifty? Right? There are Brown lawyers too just for that type of thing. Those firms can sue away.......Do you not clean house before trying to sell it? I think I should sue you because you deliberately frauded everyone by not disclosing the dirty diapers you hid in your closet before you tried to sell your house! Gimmee a break. Let the lawyers work it out, that is what they are there for. And, this has been going on since July the article states. It will continue to go on for decades...

Bye Bye--General Lee