Cathay Pacific seen posting wider fuel-hedge loss as oil drops

Crude oil’s plunge to the cheapest level in more than a decade helped the global airline industry boost profit forecasts. One airline that hasn’t fully benefited is Cathay Pacific. The airline reported an unrealised fuel-hedging loss of HK$7.42b (US$954m) as of end-June -- and oil prices have slumped a further 42% since then. The company may announce March 9 that its hedging losses last year ballooned to $8.4b. The carrier hedged much of its fuel requirements at prices higher than those prevailing in the spot market, causing it to report losses from the contracts. Oil’s sudden drop and airlines’ hedging losses are a replay of events in 2008 and 2009, when Cathay, Chinese carriers and SIA all reported millions of dollars in losses because of those contracts. <br/>