Fuel hedging by Air New Zealand

As well as hedging their foreign exchange exposure, volatility in the price of jet fuel leads to airlines hedging to achieve a degree of certainty about their costs going forward. Air New Zealand publishes its position here on its web site every quarter.

The latest announcement has just been covered in a story dated 24 October 2008 by Denise McNabb from The Independent. Given the dramatic fall in the price of oil, it is quite interesting. There have recently been some painful losses for the latest quarter announced by airlines in the United States as a result of having to mark to market their fuel hedging.

A data series and graphs on the Singapore jet fuel spot price are available from the US Energy Information Administration (see previous post). I have installed a widget giving the price of crude oil in US$ on the left hand side of this weblog.