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United, Delta Profit at Risk on ‘Silent Killer’ Hedges

U.S. airlines including United Continental Holdings Inc. and Delta Air Lines Inc. may see 2011 profits eroded as an indicator of jet-fuel costs surges to a two-year high.

Most carriers try to smooth fuel-price swings with advance purchase contracts linked to the cost of crude or heating oil, a proxy for jet fuel. Those with hedges tied to crude futures have been less protected against rising costs, with the difference versus heating oil jumping more than 47 percent this month.