Sothwest Fuel Hedging

Running Head : SOUTHWEST AIRLINES

Southwest Airlines Fuel Hedging

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Southwest Airlines Fuel Hedging

In this time of financial crisis , it is no wonder when certain organizations face bankruptcy or difficulty in salvaging the company Only those who know how to turn things around can rise successfully from the financial mud pit . In the airline industry , the Southwest Airlines is earning billions . This is because Southwest is involved in hedging an activity that can help a company especially during financial crisis

Brief Background

Initially

, Rollin King and his banker , John Parker , thought of establishing an airline company that they would name Air Southwest Co and would introduce lower prices and great service to the passengers Later on Herbert Kelleher , King 's legal advisor , joined them and they established the airline company . They decided to launch the company in Texas which would connect Houston , Dallas , and San Antonio . These cities are too far apart to be reached through rail or road . In addition , other airlines during the time have expensive ticket fares . The founders of Southwest thought that this could be an area where their airline could prosper (Center for Management Research , n .d

Southwest Airlines (SWA , based in Dallas , Texas , is considered as the largest domestic airline company with a fleet size of 508 ' and employs more than 30 ,000 staff . In 2006 , SWA had an estimate of 9 .1 billion annual revenues (Mahalo .com , 2008 . One of the reasons why SWA is successful as compared with other...