http://www.onlinetravelreview.com/2008/08/14/the-dangers-of-fuel-hedging-continentals-hedges-under-water/ Airline News and Commentary Fri, 09 Jan 2009 04:47:47 +0000 http://wordpress.org/?v=2.6.5 http://www.onlinetravelreview.com/2008/08/14/the-dangers-of-fuel-hedging-continentals-hedges-under-water/#comment-4933 charlie Fri, 15 Aug 2008 16:03:12 +0000 http://boardingarea.com/blogs/onlinetravelreview/?p=2379#comment-4933 The Chronicle is using some imprecise wording (collars vs. options) but if Contintental is using options, I wouldn't characterize this as "risky". The option to buy oil at 121 if the market price goes below that floor are worthless, but it is very possible they didn't pay much for those options. IF continental is trading those options (as I suspect Southwest and Emirates may be doing ) then that is risky, but just purchasing them isn't risky behavior. The Chronicle is using some imprecise wording (collars vs. options) but if Contintental is using options, I wouldn’t characterize this as “risky”. The option to buy oil at 121 if the market price goes below that floor are worthless, but it is very possible they didn’t pay much for those options. IF continental is trading those options (as I suspect Southwest and Emirates may be doing ) then that is risky, but just purchasing them isn’t risky behavior.

]]>