Major U.S. airlines have abandoned hedging their fuel costs and home sales unexpectedly fell in February.
Airlines Drop Hedging Fuel Costs After Losing Big
More airlines, including some of the world’s largest, are backing off spending billions of dollars to hedge against rising fuel costs after getting burned by low oil prices, the Wall Street Journal’s Susan Carey reported.
The speed of the 58% plunge in oil prices since mid-2014 has caught the airline industry by surprise and turned its hedging measures into big money losers.
Delta Air Lines Inc., the U.S.’s No. 2 airline by traffic, racked up hedging losses of $2.3 billion last year, and United Continental Holdings Inc., the No. 3 carrier, lost $960 million. Top-ranked American Airlines Group Inc. abandoned hedging in 2014 and enjoyed cheaper fuel costs than many of its rivals. Delta and United said they have no hedges in place for next year.
Existing Home Sales Fall Sharply
U.S. home resales fell sharply in February in a potentially troubling sign for America’s economy which has otherwise looked resilient to the global economic slowdown.
The National Association of Realtors said today existing home sales dropped 7.1% to an annual rate of 5.08 million units, the lowest level since November.
Sales have been volatile and prone to big swings up and down in recent months following the introduction in October of new mortgage regulations