TWO of the world’s biggest airlines are betting that oil prices won’t rally any time soon, growing more cautious after losing hundreds of millions of dollars on hedges.

    United Continental Holdings Inc. and Delta Air Lines Inc. have reduced fuel hedging as oil plunged close to a six-year low. They’ve become more like American Airlines Group Inc., the biggest global carrier, which closed its last hedging position in 2014.

    “There is a growing realization that American’s approach was the smarter one,” said Bob Mann, president of airline consultant R.W. Mann & Co. “These programs have not met expectations, costs are very high and the results have underperformed.”

    Getting it wrong has been costly. Hedging losses over the past three quarters totaled US$1.95 billion for Delta, the world’s third-largest airline, US$650 million for United, the second largest, and US$326 million for Southwest Airlines Co., the fourth-biggest U.S. airline. The companies locked in fuel prices before the price of crude collapsed over the past 17 months.

    Losses were calculated by totaling the settled hedging results for each quarter as provided on company releases and conference calls. The hedging figures were confirmed by spokesmen at all three airlines.

    Delta said last month that it hedged 5 percent of its fuel for next year, down from 20 to 25 percent announced in May and 30 to 40 percent announced last year for 2015. United is 17 percent hedged for next year, Gerald Laderman, chief financial officer, said last month. In October 2014, the company said it was 35 percent hedged for the following 12 months. (SD-Agencies)