IAG cuts ends fuel hedging to 60pc of requirement
BRITISH Airways parent International Consolidated Airlines (IAG) declared its year-ahead fuel hedging will be cut to 60 per cent of its requirement, reports London's Air Cargo News
16 May 2021 - 19:00
The company was 90 per cent hedged for when the pandemic began. Likewise, Deutsche Lutfthansa AG will cut its hedging volumes 20 percentage points.
'Given our experience of over hedging losses during the pandemic, we've been reviewing our hedging policy. The key amendments are we've moved from a three-year rolling policy to a two-year rolling policy and we've reduced the maximum levels,' said IAG chief financial officer Steve Gunning.
The move occurred after airlines were hit negatively by oil derivatives they purchased when the pandemic first began.
Low capacity forecasts typically mean their occupation in the oil market remains low, even if travel volumes return to normal.
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