Odd Lots · Friday, October 2, 2026
Many U.S. airlines have shifted away from aggressive fuel hedging strategies due to past financial losses, opting instead to pass increased fuel costs directly to consumers through surcharges and higher ticket prices. This approach is particularly prevalent among smaller airlines lacking the balance sheet to manage significant hedging risks.
“I think the U.S. carriers aren't as prevalent. It's because they got smacked in 2014 and 2015. So they realized, right, Delta recently, 2020, lost nearly over a billion dollars. So they were still hedging as well. But most of the American carriers, especially the small ones, especially the smaller airlines, They just put everything into the surcharge to pass all the costs on to the customer.”
“And that's built into the ticket. Now, you will never see a ticket that tells you the percentage of your surcharge. It will just tell you it's a fuel surcharge. And then that's it. And some of them even have done away with that. They say, that's a ticket price. You pay it and you fly. Then that's it. Don't worry about the fuel.”
“So in that aspect, that's when some of the U.S. carriers actually dropped out because they don't have a hedge book big enough or rather they don't have a balance sheet big enough to maybe take on these risks of hedging.”