Fuel Hedging
Numero Crunchero and Sue Ridgepipe have obviously thought about this problem. Page 23 of CX's 2007 Annual report lists the hedges used, these include 'collars'. If I remember correctly with a collar there is a two way bet; if the oil price goes above a certain price the bank pays the airline BUT if the prices falls the airline pays the bank ! At the end of 2007 about 6 m barrels had been hedged into 2009. I suspect that the collars are causing the problem.