1. Use the data below on WTI, Brent, heating oil and RBOB gasoline in any combination and back-test them against jet fuel to determine the best correlation. Will have to try a multiple regression to see if using two variables or more make it more efficient. Basis risk and the weights of each variable will come into play here. For example:

Determine the correlation between the following:

1. WTI vs Jet fuel 2. Brent vs Jet fuel 3. Heating oil vs Jet fuel 4. RBOB Gasoline vs Jet fuel (briefly)

And then back-test them to find the best correlation.

2012 Fuel Hedging at JetBlue Airways JetBlue-Fuel Percentage Hedged (20072012, Quarterly) Source: Created by case writer based on JetBlue Airways investor updates (2007Q12012Q3). JetBlue-Fuel Percentage Hedged (20072012, Quarterly) "Information as of 2011 Q4, at which time the hedging programs for 2012 were still not full in place Notes o Hed ged" is the percentage of fael consempton heded using derivaties for the current quarter as reported in each quarter. 2012 Fuel Hedging at JetBlue Airways Jet Fuel, Heating Oil, and Crude Oil (WTI and Brent) Spot Prices (20072011, Monthly) Jet Fuel, Heating Oil, and Crude Oil (WTI and Brent) Spot Prices (2007-2011, Monthly) Panel B: Difference in prices between Jet Fuel and crude oil (crack spread) and heating oil. 2012 Fuel Hedging at JetBlue Airways Jet Fuel, Heating Oil, WII, and Brent Crucle Oil Spot Prices, 2007-2011 (Monthly) Exhibit 6 (continued) 2012 Fuel Hedging at JetBlue Airways JetBlue-Fuel Percentage Hedged (20072012, Quarterly) Source: Created by case writer based on JetBlue Airways investor updates (2007Q12012Q3). JetBlue-Fuel Percentage Hedged (20072012, Quarterly) "Information as of 2011 Q4, at which time the hedging programs for 2012 were still not full in place Notes o Hed ged" is the percentage of fael consempton heded using derivaties for the current quarter as reported in each quarter. 2012 Fuel Hedging at JetBlue Airways Jet Fuel, Heating Oil, and Crude Oil (WTI and Brent) Spot Prices (20072011, Monthly) Jet Fuel, Heating Oil, and Crude Oil (WTI and Brent) Spot Prices (2007-2011, Monthly) Panel B: Difference in prices between Jet Fuel and crude oil (crack spread) and heating oil. 2012 Fuel Hedging at JetBlue Airways Jet Fuel, Heating Oil, WII, and Brent Crucle Oil Spot Prices, 2007-2011 (Monthly) Exhibit 6 (continued)