25 Pages Posted: 4 Sep 2006
Date Written: August 30, 2006
This teaching case describes the hedging program of Southwest Airlines and asks students to consider whether the purchase of additional (now more costly) fuel hedging contracts makes sense. The case prepares students to consider arguments for and against hedging. The case also explores the legal implications of hedging and its relationship to shareholder vs. stakeholder theory, and it asks students to consider in what circumstances hedging against unsystematic risk is a proper exercise of fiduciary duty.
Keywords: hedging, Southwest, airlines, fiduciary duty, shareholder value
Suggested Citation: Suggested Citation
Ingrassia, Michael R. and Fleischer, Victor, Southwest Airlines: Hedging and Shareholder Value (August 30, 2006). U of Colorado Law Legal Studies Research Paper No. 06-29. Available at SSRN: https://ssrn.com/abstract=928094 or http://dx.doi.org/10.2139/ssrn.928094