Like Southwest Airlines last week, Northwest Airlines is reporting a profit while reporting a loss.
The company announced today that it lost $317 million in the third quarter. The company took a write-off its hedge bets for fuel; it’s a practice that can save money when jet fuel is going up, but not when it’s coming down in price.
Northwest says if you take away the write-off, it made money in the quarter, just as you did if you take away the costs of the car repairs and mortgage. The Vikings are also undefeated if you take away their four losses.
In the long run, lower fuel prices should be good news for travelers by virtue of lower fares and an easing of the fees that airlines tacked on when the cost of fuel was rising. It should be. But it’s not.
“We waited a while to react to the increases in jet fuel. … We haven’t been able to make that up,” said Michelle Aguayo Shannon, a spokeswoman for Northwest Airlines, in a Detroit Free Press article. “But you have to really look at the airfares; there’s a false sense that fares are through the roof.”