Get ready for the fuel hedging loss!
Casino-Like Fuel Hedges Seen Hurting Airlines as Crude Plummets
Oil’s dramatic decline in the past month is a replay of events in 2008 and 2009 when Hong Kong-based Cathay Pacific Airways Ltd. (293), Chinese carriers and Singapore Air all reported millions in losses because of wrong-way bets on fuel.
The price fell 4.6 percent to $83.50 a barrel on Dec. 1, the lowest since August 2010.
Cathay’s Finance Director Martin Murray said in August that the airline hedged 44 percent of projected fuel needs for 2015 at $101 a barrel of Brent crude, and 25 percent of its needs for 2016 and 2017 at $99 a barrel.