PPRuNe Forums - View Single Post - Air New Zealand feeling the pinch over fuel prices
Old 1st Dec 2018, 03:16
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ElZilcho
 
Join Date: Apr 2013
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Originally Posted by mattyj
It makes me wonder if someone at corporate towers blew a bundle setting up next years hedging strategy?? Fuel was up for a time but now it’s on the way through the floor. Perhaps they rolled the dice on it continuing to rise
Hard to say, but taking the article at face value (my bold):

While fuel prices have retreated from four-year highs it reached in October the damage was done earlier in the year.
Luxon said fuel would make up the largest component of operational costs at $1.3 billion this year, up from $987 million last year and $827m the year before.

The International Air Transport Association jet fuel monitor shows global prices in mid-November were 13.4 per cent higher than at the same time a year ago.

Fluctuating fuel prices have contributed to the airline's share price volatility. Shares have ranged from $3.41 to $2.62 during he last 12 months.
So it appears to be a case of recovering from higher prices earlier in the year and hedging to reduce the damage of fluctuations in the next Fiscal year.
Add in the 787 restrictions on routing and the broken Auckland Fuel pipeline seeing us with Fuel stops in Australia/South Pacific, it makes sense we've had a hefty fuel bill this year.
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