BE's accounts spell out their fuel hedging policy, which is (per 2008 accounts):
The objective of our fuel hedge policy is to smooth the cost of fuel over time and to de-risk the cost escalation as far as possible, thereby enabling the Commercial team to price our product before the selling season commences. The policy is to buy 5% monthly tranches over a 12 month period, starting 2 years ahead of flying, thus ensuring we are 60% hedged 12 months in advance
They go on to say:
The company has not adopted the fair value accounting rules of FRS25 and FRS26 and recognises gains and losses of fuel derivative contracts as they mature.
Finally Note 35 to the accounts says (albeit shortened by me):
The group has derivative financial instruments that it has not recognised at fair value as follows:
• Foreign currency derivatives with a mark-to-market net asset totalling £1,830,000 (2007: £1,987,000 net liability).
• Aircraft fuel derivatives mark-to-market with a net asset totalling £3,158,000 (2007: £1,139,000 net liability).
The foreign currency derivative instruments represent 137 open contracts comprising swaps, forwards and options with maturity dates ranging from April 2008 to August 2010 which are to purchase either US dollars or
euros to meet business requirements.
The fuel derivative instruments represent 42 open contracts comprising swaps, collars and options with maturity dates ranging from April 2008 to October 2009 which are to purchase aviation fuel.
The upshot of this (and feel free to correct me) is that fuel costs are 60% hedged 18 months forward, and any gain or loss on the hedge is ignored in the annual accounts. So earlier hedges will have held their fuel costs down through their year to 31 March 2009 and they should thus enjoy a healthy profit. However hedges made in summer/autumn 2008 when the fuel price rose significantly will hit the accounts in the year to 31 March 2010 so unless they have jacked up their fares significantly (and my experience booking with them suggests they haven't) there will be a negative impact on profit.
Although they operate a fuel efficient fleet, and thus are less exposed to fuel costs than others, they will also be suffering from the economic downturn as well.
Hence I guess the forecast £1m loss referred to by Snigs.