I think that oil may come down slightly, but only slightly. Fear (Iraq, the oil confusion in Russia) is driving the market.
Frontier had only recently started hedging fuel - as CEO Potter said "we're new to this" - and had only small hedges in place, managed in-house.
Then, when oil prices got really out of hand, two things happened:
That was June '04. Solarc is not a fuel hedger, but a fuel manager, which, presumably, includes some advice on hedging, such as when and how much.
Then this appeared:
The 25% fuel hedge for six months is new, and, given the timing, must have been taken out when crude oil was about $35 bbl. Do I detect the hand of Solarc here?
Given that crude is trading over $41 bbl, it looks like a good move.
I remember that Continental took out a hedge in May at $40 bbl, and everyone said they were nuts.
Maybe. Maybe not.