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Wizz Air reassures about improved fuel price hedging

The low-cost airline said 77% of projected jet fuel requirements were covered for the current financial year to March

Wizz Air Holdings -

Wizz Air Holdings PLC (LON:WIZZ) said it has stronger than usual fuel price-hedging arrangements as it looked to reassure investors worried about the spike in oil prices following the Saudi drone attack.  

With Brent crude futures sitting around 10% higher after the weekend attack on Saudi Arabian oil infrastructure, FTSE 250-listed Wizz said 77% of projected jet fuel requirements were covered for the current financial year to next March. 

The low-cost airline said it had “taken advantage of lower fuel prices over the summer period and increased its hedge position beyond its policy minimum levels”.

Fuel hedge contracts allow airlines to establish a fixed or capped cost via a commodity swap or option, with Wizz saying its hedging policy aimed to reduce short-term volatility in earnings and liquidity.

It’s blended capped rate for the current financial year is US$692 with a floor rate of US$633, and for 2021 the capped rate is US$661 and floor rate US$603.

Along with the rest of the sector, Wizz saw its shares tumble on Monday, falling almost 5%. But on Tuesday they made a small 0.3% rally to 3,381p.  

Quick facts: Wizz Air Holdings

Price: 3424 GBX

AIM:WIZZ
Market: AIM
Market Cap: £3.52 billion
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