Michael O’Leary cocks up hedging of fuel prices

Michael O'Leary, Ryanair's chief executive

Michael O

My oh my, this really does make me laugh. Ryanair, Europe’s largest airline, lost €102 million (£92 million) in the last three months of 2008 after botching its fuel-hedging strategy!

The carrier locked in fuel prices of $124 a barrel for 80 per cent of its consumption during the third quarter, but the price of oil collapsed to a low of $33 a barrel during that period. Hahaha.

However, Ryanair said that its lack of hedging in the fourth quarter would enable it to take full advantage of the low oil price. As a result, the carrier upgraded its full-year profits forecast to between €50 million and €80 million yesterday. Its previous guidance had been to break even.

Michael O’Leary, Ryanair’s chief executive, has admitted that he “screwed up” Ryanair’s fuel strategy in 2008 after remaining largely unhedged as prices rose to $147 a barrel in July. He then bowed to shareholder pressure to protect the airline against rocketing prices by locking in fuel prices during October, November and December – just as oil prices crashed. Ryanair’s fuel costs during its third quarter rose by 71 per cent to €328 million, which accounted for 47 per cent of its operating costs.

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6 thoughts on “Michael O’Leary cocks up hedging of fuel prices

  1. What a tw*t! This is the only word I can use to describe O’Leary. I don’t normally swear, but never have I wished for a company to go bankrupt as much as Ryanair. The sooner the better.

  2. Serves him right, I used to use Ruinair since years as it was cheap for me to fly home and see my familie, but now I cant even afford that anymore and started using other airlines who are under better conditions to fly with.
    Fuck off O’Leary and I hope you get bankrupt!

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