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U.S. markets recover from steep losses
DALLAS, Oct. 16 (UPI) -- Southwest Airlines said an accounting mandate resulted in a $247 million non-cash charge, turning a profit into its first quarterly loss in 17 years.
The airline said its third-quarter earnings were $69 million without the one-time charge, The New York Times reported Thursday.
Over the years, Southwest has realized millions of dollars by locking in jet fuel prices with hedge contracts. But federal rules require the airline to value about 10 percent of their fuel contracts at current market prices, the Times said.
The value of Southwest's fuel contracts was $6 billion at the end of the second quarter. But, crude oil prices fell from $147 a barrel in July to around $80 a barrel at the end of the third quarter. This helped push the value of Southwest's fuel contracts down to $2.5 billion during the quarter, the Times said.
"Overall, declining fuel prices a very good thing for an airline including Southwest Airlines," said the carrier's Chief Executive Officer Gary Kelly.
"The world is on fire, and we're in pretty good shape. We're going to fight hard to blast through the headlines," he said.
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