Originally Posted by
sailingfun
THe charge for stock issues was smoke and mirrors. No actual cash outflow. THe 600 million plus losses on hedges are however real dollars and come right out of cash on hand. SWA got hit very hard on this and it had a dramatic impact on cash. Same for Delta just on a smaller scale.
That is incorrect. Fuel hedges are not cash losses unless they are sold for a realized loss. Whether your hedge position is currently profitable or not, it has to be accounted for as a paper gain or loss...not a cash gain or loss.
Carl