This little Reuters piece appeared on Wednesday, but it had two really interesting pieces of information.
The first bit is that CEO Doug Parker was saying that the airline has “no plans to reduce capacity any further” in the US domestic market. I think we can say that’s a a relatively good indication that US Airways thinks that things are starting to bottom out.
Second, and more interestingly:
Parker said that the airline was braced for higher oil prices, but ruled out further hedging since carriers were hurt by hedging when oil prices slid late in 2008.
Hmm. So how does US Airways plan to cope with higher fuel when that comes around? Just increasing fuel efficiency wherever possible?
Yes, many airlines got hurt when oil came off its highs, but I think that says more about hedging strategy of individual players rather than the practice as a whole.
There still seems to be a lot airline folks that carry a grudge against using futures to insure they know their future fuel costs with a fair amount in the future. Does it have costs? Sure. But are they any worse than having to ground planes and layoff employees when prices spike? They seem like the folks that would try telling me I don’t need auto insurance because I’ve only been in one accident in the last 15 years.