Airlines hedge to take advantage of low fuel prices

European airlines are exploiting a collapse in oil prices by hedging more of their fuel needs further into the future, but those that kept their powder dry before the rout are emerging as clear winners, industry sources say.

At a time of heightened price volatility, carriers are also considering using more options contracts to access lower prices should they fall further.

Many airlines, however, lack the manoeuvrability to benefit; before oil slumped they locked themselves into much higher costs, with some approaching $1,000 (€898) per tonne of jet fuel, roughly double current rates on the spot market.