Emirates announced plans to reduce its fuel hedging strategy due to difficulties surrounding short-term price movements of the commodity (Gulf News, 17-May-2011). Fuel accounts for 34% of Emirates' operating costs, with president Tim Clark stating that the airline is trying to "manage the business within a band of fuel price between USD80 and USD130 a barrel, making sure that the airline's operations are smooth".
Emirates: "I am not saying we are not hedged, but it is not to the levels that we did in the past. Nobody can predict what fuel is going to do. So we are not spending so much time on managing the risk forward as perhaps we did a few years ago, because the volatility is just too much stuff to get our mind around." Tim Clark, President. Source: Gulf News, 17-May-2011.
Emirates: "We have managed the fuel risk as effectively as we always used to and we are continuing to look at the situation as volatility [in oil prices] is very strong. The prices have come down from USD127 a barrel to approximately USD99 a barrel. And we actually removed the surcharges as we saw the oil prices were coming down. It was a bold move," Tim Clark, President. Source: Gulf News, 17-May-2011.