Irish budget carrier Ryanair has extended its fuel hedge position to cover half its requirements for the first three quarters of its 2009/10 financial year, marking an average 42% reduction in its hedged fuel costs over the same period in 2008/09.
After remaining largely unhedged during the first half of 2008 as fuel prices climbed, the carrier ultimately opted to take out this variable for the second half of its financial year and last summer extended its hedging position. Its higher fuel costs, together with weakening yields, prompted the carrier's forecast to all but wipe out profits in the current financial year.
But it had already hedged 25% of its fuel requirements for the first half of the 2009/10 financial year at the much lower level of $70 per barrel and indicated it wanted to hedge further. It has now extended its hedging position to 50% of its requirements for the first three quarters of 2009/10 at an average of $64 per barrel. This compares to an average fuel cost of $110 per barrel for the equivalent period in 2008/09.
Ryanair CEO Michael O'Leary says: "This will lock in a 42% reduction of our hedged fuel cost per passenger compared to fiscal 2008/09, and will enable Ryanair to continue to grow traffic and reduce fares, during these recessionary times, when most airlines are increasing them”.
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