There is NO reason to buy derivatives if you are not hedging. Many senior management at Allegiant come from SWA. Do not confuse GAAP with the real world of cash and tax accounting. GAAP allows for reserve accounting, allows for gain-on-sale accounting (big in the sub-prime mortgage industry for securitizations) etc. Just because they are not hedging according to GAAP doesn't mean anything - they aren't buying derivatives for fun. Actually, the fact that the gains are broken out like this is, in my mind, more transparent.