Steep capacity cut leaves airlines with overhedged jet fuel headache

Steep capacity cut leaves airlines with overhedged jet fuel headache

With a sharp plunge in oil prices and the rapid spread of the flu-like virus globally raising uncertainty when and how strongly air travel demand will recover, airlines are now left counting the cost of their heavy fuel hedging.. Airlines last suffered billions of dollars of losses on their fuel hedges during the 2015-2016 oil price crash.. Several airlines have already hedged the bulk of their normal annual fuel consumption at levels nearly two to three times that of current Brent and jet fuel prices JET-SIN.. For the first half of the year, it locked in prices at $638 per tonne of jet fuel, or $81 a barrel.. Singapore Airlines ( SIAL.SI ) hedged nearly three-quarters of its fuel for the financial year that begins in April, with 51% hedged on jet fuel at $71 a barrel and 22% on Brent at $58..