Airline CFO: Hedging Saved Us $400 Million - CNBC:
"Alaska Air begins to hedge about three years in advance. Each quarter, the company adds an incremental amount to that position (usually an extra 5 to 7 percent of its future consumption) until it hits 50 percent. It’s a strategy that is constant, regardless of volatility in the energy market.
“Our program is really designed to be price agnostic. We go into the market and buy at current prices and what it is, is what it is,” Pedersen explained.
Since it uses caps only, the company says it remains insulated from major hedging losses if prices suddenly drop—like they did in 2008 when crude oil plummeted more than 70 percent in less than 6 months."