Geldpress

Air France shares were trading significantly lower today as the airlines announced for the 5th time this year that profits would be lower.  One of the reasons for the lower profits is the expected $200 million loss from its fuel hedges gone wrong. From Marketwatch:

Making matters worse, hedges it’s employed have locked in fuel prices above the market’s level, Air France said. It’s expecting a 200 million euro hit from fuel.

It was not to long ago that nearly every CNBC commentator was praising Southwest for winning the fuel hedge gamble that kept them profitable longer than any other airline.  This new twist in Air France’s luck exposes fuel hedges for what they really are – a big gamble.    And in Air France’s case, the fuel hedge bet was a gamble that went wrong.

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