AirAsia’s hedging strategy buffers geopolitical shocks

Under a situation where none of AirAsia’s fuel requirements were hedged, MIDF estimated that the total fuel cost could increase as much as 25.7% y-o-y, assuming Brent crude prices were to hit US$75 per barrel.

PETALING JAYA: AirAsia Group Bhd is set to be well-geared to buffer further geopolitical shocks with its current hedging strategy.

The group is hedging 72.8% of Brent crude oil price at US$60.22 per barrel for the financial year 2020 (FY20) and MIDF Research is of the opinion that AirAsia’s prudent hedging strategy could weather the expected rise in oil prices.