LOT CEO: European airlines should 'very seriously whether they should hedge'

LOT Polish Airlines president and CEO Rafał Milczarski, speaking at CAPA Airline CEOs in Sydney, commented (05-Jun-2018) on the biggest issues facing the world's airlines in 2018, which includes fuel. Mr Milczarski stated European airlines should consider "very seriously whether they should hedge", explaining that "it is expensive to hedge when fuel has gone up". He also suggested there should be a "collective decision not to hedge", like in the US, as this situation would be "fair and sensible", while noting the limitation to airlines' ability to pursue this strategy. Mr Milczarski also noted that LOT is "hedged quite well" in 2019, while noting that the "view on fuel is that it is completely unpredictable". He explained that the current fuel situation was not predicted a year ago, and "forecasts today will probably be wrong in a year's time". Mr Milczarski noted the price of fuel is "mostly driven by …speculation" while acknowledging that "there are geopolitical reasons why fuel should not be on the rise". He also suggested that the "most sensible" approach is for fares to reflect cost of fuel ie increase at times of high input costs, and be reduced when fuel prices are lower.