(Bloomberg) -- One of the last remaining US airlines to hedge the price of oil has suspended the practice, supporting what some rivals have been saying for years: The costs don’t always justify the benefits.

Alaska Air Group Inc. stopped buying new crude oil call options in the fourth quarter and said it is exploring new ways to protect against volatility in refining margins, which have whipsawed over the last few years. 

“We’ve really started to rethink what is the purpose of hedging a barrel of oil for us today relative to when we started the program 15-plus years ago,” Chief Financial Officer Shane Tackett said during the Citi 2024 Global Industrial Tech & Mobility Conference on Tuesday. “We don’t know what our new go-forward is yet, but it’s something we’ll continue to talk to folks about as we figure it out.”

Before the strategy shift, the company was one of the few US airlines left that consistently used derivative contracts to protect itself against a potential surge in fuel costs. Peers including American Airlines Group Inc. and United Airlines Holding Inc stopped hedging fuel years ago.

An exception to the trend has been Southwest Airlines Co., which still routinely hedges. Many European airlines also hedge fuel, buying oil derivatives contracts late last year to protect against higher prices due to the Israel-Hamas war. Hedging brings protection but also risks: Airlines lost billions of dollars from the practice during the pandemic.

For Alaska Air, it’s the variable — and recently, high — refinery margins from turning crude oil to finished product like jet fuel that it wants to mitigate. West Coast margins have been especially challenging for the Seattle, Washington-based airline.

“West Coast refining margins have been particularly volatile due to unexpected refinery outages over the last two or three quarters,” which has been a source of “frustration,” Tackett said.

Alaska Air’s final crude oil call option position will settle in the first quarter of 2025.

Read more: US Airlines’ Latest Hedging Positions, Jet Fuel Costs

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