FACTBOX-U.S. airlines' fuel hedging positions

NEW YORK, March 13 (Reuters) - U.S. airlines hedge their expected
jet fuel purchases to protect themselves from rising fuel costs.

A hedge typically involves buying a financial contract in a related
product such as crude oil CLc1 or heating oil HOV7. The financial gains
from those contracts, when the price rises, can help offset higher costs for
jet fuel, which vies with labor as an airline's largest expense.

Other hedging strategies include so-called "collars," which are
combinations of put and call options. They generally cost less to put in
place.

Below is a table outlining the hedging positions at major U.S. airlines,
arranged by size of the airline (For story, please double click on
[ID:nN10602896]):

PERCENT
AIRLINE PERIOD HEDGED DESCRIPTION
American Airlines FY 08 24 capped at an average price of
(AMR.N) approximately $2.31/gallon of jet fuel
United Airlines Q1 08 15 mostly using three-way collars: upside
(UAUA.O) protection starting at $91/barrel and

capped at $101/barrel; payment

obligations start if oil drops below

$86/barrel

FY 08 16 mostly using three-way collars: upside

protection starting at $89/barrel and

capped at $101/barrel; payment

obligations start if oil drops below

$83/barrel; Q1 fuel cost forecast

$2.74/gallon
Delta Air Lines Q1 08 26 jet fuel equivalent cap $2.77/gallon;
(DAL.N) forecast jet fuel price $2.74/gallon

Q2 08 31 jet fuel equivalent cap $2.72/gallon

Q3 08 15 jet fuel equivalent cap $2.70/gallon

Q4 08 10 jet fuel equivalent cap $2.69/gallon

FY 09 9 crude oil call options avg strike

price $2.05/gallon

FY 10 2 crude oil call options avg strike

price $2.04/gallon
Continental Airlines Q1 08 20 heating oil collars: avg put price
(CAL.N) $2.25/gallon, avg call price

$2.41/gallon

Q2 08 5 heating oil collars: avg put price

$2.39/gallon, avg call price

$2.55/gallon
Northwest Airlines* Q1 08 45 no details
NWA.N FY 08 18 no details
Southwest Airlines Q1 08 75 capped at avg crude equivalent price
(LUV.N) of $51/barrel; Q1 fuel cost forecast

$2.00/gallon

FY 08 70 at avg crude oil-equivalent price of

$51/barrel

FY 09 55 at avg crude oil-equivalent price of

$51/barrel

FY 10 30 at avg crude oil-equivalent price of

$63/barrel

FY 11 +15 at avg crude oil-equivalent price of

$64/barrel

FY 12 +15 at avg crude oil-equivalent price of

$63/barrel
US Airways Group Q1 08 50 heating oil collars: weighted avg
(LCC.N) range $1.98 to $2.18/gallon (or

$68.79 to $77.19/barrel of crude oil);

forecast jet fuel price

$2.74-$2.79/gallon

FY 08 22 collars: weighted avg heating oil

range $2.05 to $2.25/gallon; weighted

avg crude oil equivalent range $72.04

to $80.44/gallon
SOURCE: Company filings.
(Reporting by Chris Reiter and Kyle Peterson; Editing by Steve Orlofsky)