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Delta loses $450 million bet on fuel prices
Delta Air Lines is taking a $450 million loss because jet fuel prices didn't jump as much as the airline bet they would. The Atlanta-based airline had locked in fuel purchases, in a contract known as a hedge, at levels above the current market value, betting that jet fuel prices prices would climb. And they did indeed rise. But they didn't go nearly as high as Delta had anticipated, which made that hedge a loser. So Delta pulled out of the fuel contracts, which cost the airline nearly… (money.cnn.com) Más...Sort type: [Top] [Newest]
Bet it doesn't affect the bonuses.
Hedges are insurance policies, not bets. These were protetective trades in case the worst happened, not speculation on the direction of fuel prices.
Clearly I cannot spell. "Protective"
Hedges are bets/speculation. Buyer/seller is speculating what direction the price of a commodity will be x-number of months down the road. Hedges are risky. Money can be made and lost.
They will more than make up the loss by ripping off their customers through baggage, wifi and in-flight service costs.
I thought Delta owned their own refinery. How much money did the refinery make?