This summer has been a nightmare for airline fuel pricing with prices reaching $150 a barrel. Many operators chose to fix prices with their suppliers and 'hedging' has become the sport of the season for airlines. For example Ryanair hedged at $124 and would have been pleased to see the market price at $130, not quite so pleased to see it then decline to the $100 mark. This combined with the strengthening dollar price has created mayhem for those reponsible for airline cashflows. British Airways has done better with it's hedging having secured a price of $96 per barrel for 80% of it's fuel requirement for the third quarter of 2008. The drop of sterling against the dollar however threatens to negate any gains made through shrewd fuel trading.
Sunday, 5 October 2008
Airlines suffer oil-price volatility
This summer has been a nightmare for airline fuel pricing with prices reaching $150 a barrel. Many operators chose to fix prices with their suppliers and 'hedging' has become the sport of the season for airlines. For example Ryanair hedged at $124 and would have been pleased to see the market price at $130, not quite so pleased to see it then decline to the $100 mark. This combined with the strengthening dollar price has created mayhem for those reponsible for airline cashflows. British Airways has done better with it's hedging having secured a price of $96 per barrel for 80% of it's fuel requirement for the third quarter of 2008. The drop of sterling against the dollar however threatens to negate any gains made through shrewd fuel trading.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment