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American's 787s and the sharp drop in fuel prices
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Publish-date-icon October 16, 2008
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These items are unrelated, but they are bookends on the state of the industry. American's order came as something of a bolt from the blue. Long discussed and awaited, but it looked far off given the state of the industry. Clearly this puts pressure on other competitors - especially since American went with the larger model. The other bookend is the sharp drop in fuel prices - also unexpected. Southwest has long been a beneficiary of its fuel hedges, but even they were caught by surprise and have a $120m loss to show for it. Their first loss in 17 years.

Scott Hamilton and Jon Ostrower discuss these two issues and review what it might mean. One thing is clear, this industry really defies predictability.

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