Tough Quarter for Industry

Tough Quarter for Industry

The week of 10/27/08

fuel

United Airlines, Delta, and Southwest Airlines all recorded quarterly losses partly because of a fuel cost contract gone wrong. The airline carriers all lock in their jet fuel contract far in advance. This ended up working against them when they locked their prices in way higher than jet fuel ended up being at the time. This move cost them millions. Although this hurt many airlines they are still looking to the future optimistically. In an article entitled "UAL, Delta Hedge Losses May Herald Airline Profits" Kevin Crissey, an analyst at UBS Securities in New York says, "The perception is that the airlines are in more trouble than they actually are." Crissey projects profits for the airline industry next year, which is great news for the industry!

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