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Price of oil - and what EI and FR are paying for it

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  • 20-02-2009 9:36pm
    #1
    la la land
    Closed Accounts Posts: 30 ✭


    the current price is about $42 a barrel..

    I just saw that aer lingus has hedged 72% of its fuel at $911 per tonne.. that works out at $123 PER BARREL
    Similarly, ryanair paid $124 per barrel for its 80% hedging..

    can't see how any of them making money with that kind of commercially disastrous decisions... also, isn't it based on how much flying they think they are going to do - which is also probab less than they thought a few months ago??!
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    #2
    derry
    Banned (with Prison Access) Posts: 1,380 ✭✭✭derry


    la la land wrote: »
    the current price is about $42 a barrel..

    I just saw that aer lingus has hedged 72% of its fuel at $911 per tonne.. that works out at $123 PER BARREL
    Similarly, ryanair paid $124 per barrel for its 80% hedging..

    can't see how any of them making money with that kind of commercially disastrous decisions... also, isn't it based on how much flying they think they are going to do - which is also probab less than they thought a few months ago??!


    $911 per tonn makes ball park 1100 liters at 09 specific density or $0.82 cents per liter or les than €0.60 cents a liter

    As the 737 get 60MPG per passenger and the bigger jets airbus things get more than 75MPG per passenger that fairly cheap

    So if fuel prices keep to drop the fuel cost will drop a lot more


    Derry


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    #3
    vinylbomb
    Registered Users Posts: 605 ✭✭✭vinylbomb


    They have hedged at that level, which means they have a contract which will expire at some stage in the future, and at that time they are obliged to buy the amount specified by the contract.

    At the same time, they are free to purchase oil at the current market rate.


    Hedging insures them against a rise in the future, it doesnt commit them to buy at that rate consistently.


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