Originally Posted by
Check Essential
"fuel hedge ineffectiveness" ???
This euphemism really ticks me off. They used to report a number but management now does their best to hide the money they lose gambling in the commodities markets. At least the analysts have caught on. Glad to hear them ask the question why our "non-operational" losses are so high.
Still hard to pick out exact numbers but it sounds like they lost either $90 mil or $72 mil on fuel hedges for the quarter.
About equal to employee profit sharing.
Fuel hedge ineffectiveness refers to the loss or gain attributed to the lack of perfect correlation between the pricing movement of the commodity used to hedge (usually crude) and jet fuel. The price of jet fuel does not move in lockstep with the price of crude. Unfortunately there is no futures market or options market in jet fuel so even if they "guess" right about the price movement of jet fuel the hedge may be "ineffective."
Now that you know what it means are you still ticked off?