Delta Airlines Takes $450 Million Hit After Betting Wrong On Gas Prices

CNN Money — Delta Air Lines is taking a $450 million loss because jet fuel prices didn’t jump as much as the airline bet they would.

The Atlanta-based airline had locked in fuel purchases, in a contract known as a hedge, at levels above the current market value, betting that jet fuel prices prices would climb. And they did indeed rise. But they didn’t go nearly as high as Delta had anticipated, which made that hedge a loser. So Delta pulled out of the fuel contracts, which cost the airline nearly half a billion dollars.

Shares of Delta (DAL) fell 4% in midday trading Tuesday.

Hahahaha awesome. AWESOME. Sweet bet guys. Fuck you Delta. Every flight these assholes are making bets — overbooking and hoping like 8 people won’t show up. Of course they do show up, so you go through the peak of human depression (the boarding process) only to discover that someone else too has seat 25 E. Then they do that thing where they offer you like a $20 Best Buy gift card and a room at the Motel 6 if you’ll take the first flight out in the morning. Awful. It ruins your entire weekend but hey, it’s profitable so they do it literally every singe flight.

Well not this time. This time they tried to hedge against rising gas prices and got absolutely SMOKED. Four hundred and fifty schmillion down the drain. Feels good. Real good. You know what’s not going to feel good? When they raise ticket prices by triple digits to recoup losses. Then it might be worth it to fly Southwest. They’ll take you anywhere for like 75 bucks. Pretty sure they don’t tell you where you’re going but if you’re willing to roll the dice, they’ll fly you somewhere and it’ll be cheap.

PS – No secret that the airlines receive billions in government subsidies. I may have just laughed at Delta betting away our money but whatever. Still feels good. Fuck Delta.