Enthusiasm for hedging wanes among US airlines

Low volatility and industry consolidation reduce need to hedge

Bank commodity desks have suffered many blows in the past several years: costly new regulations, an exodus of talent to hedge funds and trading houses, and repeated hammerings from the press and politicians over allegations of market manipulation.

To that list, one can add another challenge. Airlines' fuel hedging activity, which was once a dependable source of revenue for bank commodity trading units, has become a lot thinner on the ground. Industry observers say major US carriers have been