Airlines Lose Billions of Dollars in the Oil-Market Casino
- Fuel hedges of ten airlines accrued losses of $4.65 billion
- Many companies were left over-hedged as they stopped flying
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Many of the world’s airlines already stung by the pandemic grounding flights are now finding out what a risky place the oil market can be.
Ten airlines in Europe and the Asia-Pacific -- where carriers tend to purchase oil derivatives to hedge against volatility in fuel prices -- have lost about $4.65 billion on those contracts this year, according to financial results compiled by Bloomberg through June 3. Deutsche Lufthansa AG and International Consolidated Airlines Group SA account for about half the total.