corl737

SWA has undeniably maintained a profitable position throughout the post 2001 downturn. I read a lot of posts by various people stating that Southwest Airlines would not be profitable without their fuel hedges. My question to these omnisient analysts is this, "if SWA did not have fuel hedges, is it not conceviable that they would have modified their business plan to remain profitable in a difficult fuel-price environment?"

Here's are a couple of my speculative scenarios ...

1. Perhaps without fuel hedges SWA would have had to enact a more aggressive tactical plan, striking directly at the heart of troubled carriers, attracting passengers and revenue like a carnivorous predator. Charlotte. Denver. Minneapolis. Each might have seen phenomenal SWA start-ups while the former "hometown" carriers were collapsing to the turf, gasping and clamoring for the lifeblood of Chapter 11 only to realize their eventual fate of Chapter 7.

2. Maybe a massive retake on single-aircraft-type operations would have ushered in a fleet of long-haul wide-body aircraft to compete on the lucrative trans-con, or maybe even oceanic routes, fed directly by the expansive SWA domestic network.

Perhaps you laugh at my musings. I know I do because I know that history has already played out. And in that history, SWA was profitable every single quarter of every single year. To say that fuel hedges were the sole reason for SWA's profitability is to discount the ability of this highly capable management team to modify the company's plans and proposals. Maybe by not being forced to implement more aggressive practices Southwest's fuel hedges actually allowed the weaklings of the industry to survive.