Air France presented its accounts on Friday July 31, like all major French companies. Losses are estimated at 2.6 billion euros in the second quarter, revenues of 1.18 billion against 7 billion last year and the fuel budget at 218 million euros, against 1.4 billion at the start of the year. ‘last year. But it is a line of financial accounts that intrigued Le Point: “Impact of fuel over-coverage – 105 million euros”. This is in fact a bet, as on the stock market, made by the airline, according to the magazine. This is called “hedging” or fuel hedging: Air France has negotiated fuel costs with the refiners supported by the banks. It is a financial mechanism that can be expensive: in this case, Air France not having used the fuel, it pays 105 million euros for nothing.
The group’s chief financial officer, Frédéric Gagey, explains that last year, “Air France had therefore anticipated an increase in the barrel with the good health of the economy and bought at the current rate 60% of consumption for the next twelve months and 20% of that of 13 to 24 months “. This had worked well in 2019 since the mechanism had allowed a saving of 40 million euros. Other companies do the same: British Airways and Iberia. However, with the fall in traffic due to the pandemic, fuel consumption has not been the same. The companies favored the B777s, B787s, the A330s and A350s, twin-jets, rather than four-jets, A340, A380 and B747.
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Impact on ticket prices
The fluctuation in the price of plane tickets would be due to this fuel cover: it represents 25% of the ticket. Companies rarely pass on the variation when the barrel drops, because they sometimes paid a high price for fuel a year earlier, Le Point added. On the other hand, when the barrel
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