Is hedging at 120 really so bad?
If indeed Ryan Air has hedged at $120 it is not such a stupid proposition as you have made out.
With the current weather patterns around the american oil fields production has been shut down which may lead to a temporary spike in the price of oil due to under production - as the weather patterns may be temporary or further storms may occur. The longer the production is shut down to be made safe the longer and higher probabilty of a spike there will be.
But we cannot say its stupid as when you buy on a futures market you are buying an item to be delivered in the future at an agreed price - so what the price is now is of little consequence, its the expected factors around the time of delivery that affect the price of oil then. Whilst market analysts say that around $100 is the correct price for oil there may be factors MOL's financial advisors are taking into consideration that could appear around the time the Oil is due to be delivered.
So what we can say is that it is not so stupid for Ryan Air to do this as what it allows is for financial planning and budgeting, Ryan Air at least knows now what cost bases it has to cover during that period of delivery and these will not change regardless of the price of oil at that time.
We also have to remember with a futures market, Ryan Air will not just go in and say I want to buy at the price of $120, it will be buying at the current market rate for the period in question - which if thats the current rate then the analysts expect that to be about the right price for the oil when it is to be delivered.
In a futures market the prices may be dictated by speculation and how many people are buying and selling, if more people are buying the speculation is that the price is good and the market will rise. If more people are selling then the price could go down.
Whilst Ryan Air have bought at $120 today, they may sell it at $130 tomorrow and make a tidy profit. This principle is how risk markets work, the risk is you can make money or lose money. Ryan Air would not enter into a risk market blindly without financial advice on expected outcomes. Typically a specialist brokerage firm will be used that will manage the risk on their behalf.
So whilst I have no personal oppinion of MOL - I dont see why he should "fall on his sword" when it actually appears quite a shrewd move to protect the business of Ryan air.
p.s. I am plain ole SLF - a programmer by trade who has worked on software for trading markets.