[ssanders82]

"A hedge on oil price is a bet on the way it will swing."

Well I mean it's implemented that way (buying long-term futures) but it's really just locking in a set price. Oil prices skyrocketing doesn't make them infinite money, because they have to either take contract delivery at the price they originally bought at, or use their futures profits to buy at the spot market. In the same way, falling oil prices doesn't cost them huge amounts of money, they just won't be able to take advantage of the fall in prices like a non-hedged carrier would.

I assume they try their very best to hedge to actual predicted usage and not try to profit from swings either way. If they could do that they'd be better off running a hedge fund.