News and notes from around the interweb:
- House Transportation Committee Chairman Congressman Bill Shuster (R-Airlines for America) has found that his personal relationship with an airline lobbyist has become an issue in his re-election campaign. (HT: David M.) He claimed she doesn’t lobby his committee, but that’s not actually true and she hardly needs to in any case.
- Airlines are apparently once again getting back into fuel hedges betting that oil has bottomed, becoming complex derivatives trading firms not just air carriers. And despite a history of big losses, for instance United lost hundreds of millions of dollars on fuel hedges two years ago, after they lost lost over half a billion dollars in a single quarter in 2008 on its fuel hedges. And that’s after decrying the evils of oil speculation.
- Verizon+ Rewards Devalues
- In January I predicted that the potential collapse of passport-free travel across much of Europe could be one of the biggest stories of the year. Relatedly, the EU is considering requiring US and Canadian citizens to have visas in order to enter EU countries.
- Marriott CEO’s wants to share guest data with the government in order to ‘welcome’ people. (And it was only just last year that hotel guest privacy won a victory at the Supreme Court.)
Arne Sorenson, Marriott International CEO, joined Pritzker on stage at the summit and said the private sector shares equal responsibility with governments to be transparent and share security data.
“It’s going to be about information,” Sorenson said. “How do we make sure we are capturing that through the private sector and among governments and identifying as quickly as possible those who pose no threat in travel?”
“We facilitate that travel and roll out that red carpet of welcome for them. How do we identify where the risks are? Governments also have information, and so does the private sector. How do we make sure we pull together this highly collaborative process and voice that says to the rest of the world, ‘You’re welcome, and we trust you?’”
- Apparently Japan Airlines credit cards have a feature no other cards offer — they fly. (HT: Paul H.)
Your comment about fuel hedges misses the whole point of hedging: it’s insurance. I’ve had car insurance for more than 20 years, and in all but one of those years, I lost money on it. Should I stop buying car insurance?
Insurance and hedging are completely different.
I think you meant that United lost hundreds of millions, not billions 🙂
@Andy, hedging is exactly like insurance. If united really lost hundreds of millions on oil futures, then they weren’t hedging, they were speculating. More likely, they were forced to mark to market and had to show losses on their contracts, but those would be paper losses, not real ones. Their is also some possibility that because oil is not a perfect hedge to airplane fuel, that there was some sort of fundamental shift in the relative price between the two that went against them. In reality, if they can buy futures on airplane fuel and they buy as much as they will need, it is a perfect hedge and is insurance against rising prices.