In a Wall Street Journal article titled “Sparing Fliers Even Higher Airfares,” Scott McCartney claims that jet fuel hedging by Southwest Airlines resulted in lower airfares for passengers on all airlines: “Without (the fuel hedging) windfall, (Southwest) likely would have had to jack up fares well beyond last year’s (fares).” Other airline industry analysts have also claimed that Southwest charges no fee for baggage (“Bags Fly Free”) largely because of the airline’s success in hedging its fuel costs. Evaluate these two claims.
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