Continental Airlines has increased its fuel hedges for the remainder of this year and next as oil prices remain near record levels.
Houston-based Continental is making the move at the same time it has unveiled plans to cut the number of flights it operates worldwide because of fuel costs.
Hedges act like insurance against higher prices. The practice is a strategy to minimize exposure to an unwanted business risk.
They also can lock a carrier into buying a certain amount of fuel above market prices, said Harlan Platt, a finance professor at Northeastern University's business school who follows the airline industry.
"This is a little bit like buying car insurance after you wreck your car," Platt said Friday. "Continental will most likely be losing money on its hedge instead of benefiting like Southwest has."
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