Originally Posted by
sailingfun
SWA’s fuel hedges were worth 4 to 5 billion and had fuel not dropped overnight from 140 to 40 a barrel they would have taken out two legacy airlines Delta being one of them.
OK so 4-5B. How many billions have we bought back so far? How many billions more to be bought back? In this industry odds are overwhelming (as close to "guaranteed" as anything can be) that when the industry and economic winds shift, we'll rue the day we wasted that much money.
I think DL could have fended off SW because they were really going after USAir and UAL first and formost. If they were successful in destroying either one, the other plus us would have inherited a lot of time to ride it out long after their hedges went away and they would have been the "last man standing" with their mostly 737-700s paying more than 777/Whale pay anywhere else.
But yes it was a scary time. How less scary would it have been if even one of the billion dollar mistakes of the recent past even at that time had instead still remained to pad the operation with vital breathing room?
Way too much emphasis is focused on quarterly numbers and isolated YoY metrics etc, sometimes at the direct expense of long term success and even viability. Maybe the stratedgy when the storm clouds start gathering again will be like the two men hiking who came across an angry bear. One put on his running shoes and the other said "why are you even bothering, you can't outrun the bear" and he said "I don't need to outrun the bear, I only need to outrun you."
I'm sure there's some trailing average graph equation in a textbook somewhere that justifies all of it.