Southwest Fails?

No, they didn't. This article caught my eye bc we recently had to study Southwest for class, and the fuel hedging decision was one of the practices that we examined closely.

Southwest is an interesting airline; their practices are summarized nicely in the fourth-from-last paragraph ("The emphasis on . . ."). Fuel hedging isn't a bad practice; Southwest was just caught in a volatile market. Their previous savings based on fuel hedging surpass their loss this quarter.

Thus, Southwest taking a loss this quarter based on a fuel expense is hardly cause for alarm. Their overall business model is sound, and they are doing pretty well considering what's going on in the rest of the marker.

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