NPR.

This is the indicator from Planet Money. I'm Daryan Woods.

And I'm Waylon Wong.

I think by now it's been a familiar exercise since the war in Iran started.

You open a browser tab.

You look at airfares for a summer vacation.

And then you close your laptop and you throw it into the ocean.

Yes.

It is a ricochet effect economically about this straight-of-Hormuz closing and how that's affecting airline prices. Yeah, jet fuel accounts for around 20%

of a typical airline's costs. And the price of jet fuel has actually shot up more than crude

oil, gasoline, or diesel. So many people who are shopping for airfares right now are feeling

this pain. Hiking airfares is this obvious lever that airlines can pull

when their costs go up. But there's another one that these companies do have at their disposal.

It's a strategy known as fuel hedging. Airlines like Cathay Pacific, Luthansa, and Qantas do it.

But most airlines in the U.S. haven't done it for a decade.

So today on the show, what is fuel hedging? Why did airlines in the U.S. stop doing it?

And what will they do now?

Jerry Laderman is an airline veteran.

He worked in the industry for around four decades, mostly on the finance side.

He was treasurer of continental airlines and eventually became the chief financial officer at United Airlines.

One constant in his career was looking at oil prices.

I've been retired for almost two years.

...