Oil Hedging By AirlinesIn the past when hedging was common, not all airlines had the same hedge. when airline attemfted to raise fares ,the airline that had the most profitable hedge often under cut fare increases or did not even go along with the increase.w When is the last time that you were aware of a posted increase by any airline. Now with no one hedging,all airlinrs are on an level playing field and the avent of dymamic pricing, fares are adjusted as oil prices rise. As a result, when oil prices were rising,Canadian analysts were steadily trimming estimates Air Canada was adjusting fares that resulted in a blow-out quarter.
Oil prices are no longer the precieved negative that it apprars to be. Only if fare increased effect demand is oil a negative. Judging by North American traffic numbers ,this is not the case.