@mturi - KQ's official policy on hedging is for 'risk management'... yes,the information is inadequate though more than they gave us last year.
* Unless KQ disclosed their hedges as of 30 Sep 2009 (the info was NOT provided in sufficient detail) it is difficult to calculate the gains/losses on the hedge positions.
** The price of oil can & will vary in the next financial year. I believe cheaper (less than $108) will benefit KQ much more than the losses from the 'old' hedges.
*** I (like you) am certain that KQ entered into other hedges after 1 April 2009 which would have been more favourable than the 'old' hedges.
**** KQ will still have to pay real cash (not just book entries) as the 'old' hedges expire. This is a negative for KQ but the good news is that they have to pay less than accounted for in the 2008-9 FY.
***** The Forward Curve was wrong in 2008... KQ was told by its 'consultants' thqt oil was going to $200 (Naikuni even emphasized this)... The Forward Curve is at best an intelligent guess... but not always right in scale or in the same direction...
****** I just hope that KQ has bet the right way this time around!
******* Ultimately,how is KQ doing as a business? If it cant keep its passengers happy... it does NOT matter if oil is at $10... it will go broke!
Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett