Did anyone attend the business briefing?
Thread Starter
From the Friday update
Translation:..............We f
up the hedging AGAIN.............
With things so gloomy on the business side, we are pleased to see a significant drop in fuel prices of late. However, this is not as good as it sounds. First, we will inevitably see a reduction in fuel surcharges soon. Second, the hedging protection we benefit from when prices rise has to be paid for by benefitting less when prices fall. So we don't get all benefits of the lowered fuel price as we are also at risk of a hedging loss. Nothing in life is easy, I’m afraid!
up the hedging AGAIN.............
Thread Starter
luck? depends on the type of hedging they used. Obviously not one with any get out of jail clauses. Also how much of our fuel was hedged? and for how long?
AND I hope they are hedging at $85/b for 5 years now, I can't see how it will ever be this price again, ever.
AND I hope they are hedging at $85/b for 5 years now, I can't see how it will ever be this price again, ever.
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Hedging/surcharges
Interesting that they should mention losing from hedging. CX made around $350m in the first half on fuel hedging vs fuel bill of $19billion - that equates to around 2%. Qantas hedging gains equated to 12% of their fuel bill and they made a record profit. Qantas recently announced that their hedging will see them with an average fuel price of $100/barrel (jet not crude price) so their hedging has hurt them slightly for the next few months. So either CX decided to madly hedge when fuel climbed to almost $200/barrel(jet) or there is a little bit of expectation management....
The surcharges - you got to love the negativity on that one. Fuel surcharges for all of October and November are based on almost peak fuel prices. The Oct/Nov surcharge has dropped 10% vs the previous 2 months whilst fuel prices have dropped more than 50%.
Why does management insist on simultaneously complaining about the glass being half full and half empty?
The surcharges - you got to love the negativity on that one. Fuel surcharges for all of October and November are based on almost peak fuel prices. The Oct/Nov surcharge has dropped 10% vs the previous 2 months whilst fuel prices have dropped more than 50%.
Why does management insist on simultaneously complaining about the glass being half full and half empty?
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But did'nt they whinge and moan when the fuel went through the roof 
Now they are saying that they won't benefit much/straight away from the drop in fuel prices
So let me get this straight........they are just a bunch of liars
Do not expect respect and loyalty from your employees when all you do is lie to them
Now they are saying that they won't benefit much/straight away from the drop in fuel prices
So let me get this straight........they are just a bunch of
liarsDo not expect respect and loyalty from your employees when all you do is lie to them
Hedging is educated guess work, nothing more, nothing less. If they have hedged above the current price of oil they are in the same boat as a lot of other airlines. I heard Ryan Air hedged almost all their fuel for the next two years at US$120.00 per barrel and that is oil price not jet. My personal guess is that they are probably hedged no more than 30% based on there track record over the last few years. The million dollar question is how much did they hedged at?
Thread Starter
yes, I guess we'll have to wait for the end of year report to find out what price they hedged, for how long and what % of the total fuel bill.
Like I said before, wouldn't it be a good idea to hedge now? at $85/b as much as you could as long as you can?
Like I said before, wouldn't it be a good idea to hedge now? at $85/b as much as you could as long as you can?
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Fuel Hedging
Pretty sure I once saw an interview with TT online where he mentioned that CX can't get burned by poor hedging because they hedge in a way where they get the option to buy at a price, but are not committed.
I just can't find it now.
EDIT: This is the interview:
Bloomberg News
I just can't find it now.
EDIT: This is the interview:
Bloomberg News
Last edited by MilPilot; 2nd Nov 2008 at 15:36.
