Originally Posted by Probe

Any bets on UAL's potential fuel hedging losses? DAL is doing a great job of claiming they made a lot of money in the 4th quarter, except for those pesky hedges. With those, they lost 700 million. But they did liquidate a lot of 2015 hedge positions. They brought those losses "forward". This might have been a mistake, but at least their accountants are being honest.

After perusing a bunch of different airline and business sites, UAL is going to "bring foreword" 2% of their 2015 hedges into 4 qtr results. Their guidance is this will add .08 cents per gallon to 4th qtr fuel prices. The cost basis of this estimate was not given.

But my basic math ability tells me that if they used the same cost basis, and brought 100% of 2015 hedges foreword and realized the losses now, it would be a loss of about, aheeemmmm, 5 billion dollars.

I also read that there was one or two airlines that are so underwater on their no cost "collars", that they are getting margin calls on their accounts. The same article said they were struggling to arrange enough collateral to satisfy their brokerage house.

I would suggest we start a pool, but we only have a day or two to start it.

I hope I am wrong.