The hedges help, but when they run out it won't be the end for a number of reasons. Their overall cost structure is much lower than any legacy out there. The point-to-point route structure allows for fewer gates and fewer employees at each station. Their business model used to target leisure travel but it attracts the all important business customer now too. Their frequent flier program is dirt-simple, and relatively cheap for them to upkeep. Because of this, they can raise their fares, and still be competative. As far as expansion, they really don't expand fast into new markets. They have a tendancy to go all out when they enter a city however. They don't just add three or four flights a day like say, Air Tran. They add a couple dozen and saturate the market so the competition has to react.

Also, who's to say that these hedges are going to "dissapear". They have lots of cash and are in a strong position to adjust. Fleet modernization, outfitting their fleet with winglets (I think they were the first on that bandwagon). I'm sure they have lots of resources working on this. Hedging is pure speculation as stated. If they hedge at $60 a barrell and prices go to $80 a barrell, they'll still smell like roses.