Fuelling change

Many airlines have been active hedgers of their jet fuel consumption, but rising oil prices have put a severe strain on the airline industry and forced firms to rethink their strategy. By Alexander Campbell

Every airline is essentially paid to burn kerosene – a business plan that has been looking less and less attractive, as passenger yields continue to decline and aviation fuel prices remain locked at high levels.

Fuel spending represents 24.1% of an average US airline's budget, according to the Air Transport Association, the trade organisation of US carriers. This figure is fairly representative – for example, Asian carriers spent 20.4% of their total operating budgets on fuel in the financial