For airlines having problems with rising aviation fuel prices, hedging of fuel remains the best way out, British Airways has said.
The airlinesâ€™ Regional Service manager for West Africa, Paul Mooney, made the observation at the launch of British Airwaysâ€™ new lounge at the Murtala Muhammed International Airport in Lagos.
His observation comes as a sort of recipe for local carriers in Nigeria, who have had to struggle to survive as a result of increasing cost of fuel.
Mooney said though British Airways recorded some losses two years ago as a result of hedging, due to falling oil prices, the airline had gained immensely from hedging. Hedging, in aviation parlance, is a situation where airlines buy fuel at relatively low prices in anticipation of an increase, and save money as a result.
â€œAt British Airways, we hedge approximately 80% of fuel.Â In fact, we have paid for fuel for the next two to three years,â€ Mooney said.
According to him, hedging is the way to go, in the face of the volatility of prices of fuel, which has become unpredictable.
He attributed the risk in hedging to collapse of exchange rate, but stressed that the gains of hedging far outweighed the pitfalls.
On the merger between British and Spanish Iberia Airlines, Mooney said it would be a major boost to the airlinesâ€™ operations, adding that the co-operation would take the mergerâ€™s fleet to 409 aircraft, 209 destinations and 76 lounges.
According to him, this is sure to improve flight connections for customers of both British Airways and Iberia Airlines. On the British Airwaysâ€™ partnership with American Airlines, Mooney said it would enable both carriers share flight schedules, prices and connections, as the partnership would offer 433 destinations in 105 countries, with 5200 departures daily. He said British Airways had a review order of six Boeing 777-ER aircraft, with a firm order for 24 Dreamliners (Boeing 787 aircraft).
This, according to him, is exclusive of an option for 18 of such aircraft type, adding that the airline would start taking delivery of the aircraft in October 2010.
He also disclosed that British Airways has placed firm order for 12 Airbus 380 jumbo jets and an option for another seven.
Mooney said British Airways would start taking delivery of the jumbo plane in July 2003, and lamented that the airline would have loved to deploy the aircraft to the country but for inadequate facilities that could accommodate it.
On the new lounge at MMIA, Mooney said it was British Airwaysâ€™ way of making its customers in Nigeria, especially First and Business Class passengers comfortable before their flights.