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Algae Oil Production (AXcess News) Houston TX - Southwest Airlines (NYSE: LUV) raised fares Monday citing higher jet fuel costs. Southwest said it was raising the cost of one-way fares $10, which led to an industry-wide ticket increase.
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Algae Bio Fuel Southwest said it needed to raise fares in order to offset $600 million in fuel cost increases the airlines estimated that it would incur.
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Algae Fuel Cell While Southwest Airlines is known for brow beating the competition with low ticket costs, the increase the Dallas-based airlines imposed for one-way ticketsFriday nightled to most airlines following suit by late afternoon. The last time Southwest raised fares was in January.
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Algae Based Fuels The rate increases ranged from $10 for flights under 400 miles to as much as $309 for Southwest's most expensive flights on walk-up last minute flyers.
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Diesel From Algae American, United, Delta, Continental, Northwest and US Airways all matched Southwest's fare increase by late Monday afternoon.
Green Fuel Algae Southwest saw the move as a hedge against what it says will be future, higher jet fuel prices that allow the low-fare air carrier to begin offsetting those anticipated fuel price increases, suggesting that it can hold off raising ticket prices by that process.
Algae Fuel Production In the past, Southwest hedged its fuel costs by buying options, but with oil prices remaining above $60 per barrel the chances of it coming out ahead through hedging are less likely.
Bio Diesel From Algae Last year, Southwest bought the majority of its fuel at the equivalent of $26 a barrel for oil.Only 15 percent of its fuel was purchased on the spot market, where prices were roughly double.
Biodiesel Fuel From Algae This year, Southwest has options covering just 70 percent of its fuel, and at the higher price of $36 a barrel. Those percentages keep falling, and the price of the options keeps rising, into 2009.
Algae Into Fuel Airline stocks Monday all declined after crude oil prices bolted $1.81 per barrel on the New York Mercantile Exchange to close at $61.77 per barrel.
Algae Fuel Source The fare increase imposed by Southwest was the largest in its history.
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