Correct me if I am wrong but a hedge does not bind the company to purchase fuel at $100 a barrel. They pay a fee (purchase an option) to have the option to purchase fuel at eg $100/ barrel. If fuel goes up to $180 / barrel then they exercise the option and laugh all the way to the bank saving $80/barrel. If fuel goes down to $35/barrel as it has then they do not exercise the option, lose the small fee they paid for that option, and buy at market rate of $35/barrel.
Same with the currency hedge, so hedging is a very smart thing to do, much like an insurance policy. So my summation would be
VB have 2 very good Ace's in the hole with a currency hedge of 200mil at 95c and fuel hedges not being exercised and just buying fuel at market rates. I would also suggest some smart person in
VB has been hedging fuel all the way down so that when it does go back up they ride that hedge at say $30/barrel.
So
VB really has no penalty whatsoever for its hedges just plenty of pluses in exchange for a premium to buy the hedge in the first place!
I would also suggest
VB's figures will come out better than expected (bar the V Aus costs) as fuel has fallen from July - 154AUD/barrel to now 54AUD/barrel. BG did say every $1 in the barrel costs 1 mil , so effectively 100mil has been gained. Hopefully this has not been squandered elsewhere. Not sure of Sing Jet prices but they will be fairly relative.