Haughtney 1,
Try looking at the following site. It gives a good historical perspective on the price of oil, and the factors that influence it:
http://www.wtrg.com/prices.htm
Crank 1000,
You are correct - Qantas [like a number of other airlines] has hedged, and continues to hedge, fuel. In Qantas' case, they have various amounts of fuel hedged at a range of prices - some is hedged at $90 a barrel.
The problem with hedging is that you actually have to pay for the oil now even if you won't use it for 3 or 4 years. This means a significant cash outlay - which a lot of airlines can't afford. It would be almost impossible for Qantas to hedge 100% of its fuel - at over USD$4BN a year [QF estimate of its fuel bill] they would be broke in no time [or maybe they could get staff to work gratis?]. I suspect QF has hedged around 20% of its fuel at $90 a barrel.
Spare a thought for US carriers in or about to come out of chapter 11 protection. They aren't allowed to hedge fuel, because they have no cash [or aren't supposed to have any, anyway] - and they can't borrow [they're technically bankrupt].
Spare a thought also for the LCCs. Most of their assets are leased [aircraft, facilities, etc] and they have nothing to put up as collateral against borrowing to hedge. So, they're truly at the mercy of the market.
I'm sure you've seen those TV programs where the crew has to take a whip-around from the passengers to buy fuel to get them out of some foreign location - well it may start happening on a more regular basis when the LCCs start facing up to the reality of fuel prices.
Tootle Pip!