Some airlines will lose ‘shedload’ of money on oil, Ryanair says

Bloomberg

Airlines that aren’t currently hedging their fuel bills are set to lose a “shedload” of money as a result of high oil prices, the head of Ryanair Holdings Plc.
Brent crude is trading near $91 a barrel as surging global consumption pushes prices to a seven-year high. That’s problematic for fuel-consuming industries like airlines, where oil can make up their single biggest cost.
Airlines typically use oil swaps and options to cap, or hedge, their fuel bills when crude prices surge. But many carriers lost billions of dollars in the oil market when the pandemic brought flying to a near-halt globally. There was little to no fuel demand to offset loss-making derivatives positions, and as a result some have either stopped hedging or scaled back their volumes. “We have seen some spectacular deviations by some of our so-called competitors, arguing that they now will be unhedged because they’ve never made money hedging,” Chief Executive Officer Michael O’Leary said on a call with analysts. “Well they’re about to lose a shedload of money by not hedging, particularly with spot prices up to $91 a barrel.”