They've done very well out of their hedging this calendar year. They moved to their maximum allowable, (within their own rules) hedged position in late January 16 when oil was just on U.S.$30 barrel.
Hedging for all airlines was terrible last year when oil fell dramatically and airlines that don't hedge did very well as a result. There is always a cost to hedging, both visible, see any NZX attachment, (I will find one and post a link) and invisible, the staff required to monitor and initiate the hedging programme. Yes all business's need to know their costs but I often wonder if over the long run taking into accounts wins and losses from hedging whether all that really results is all the significant costs from the programme.
https://www.nzx.com/files/attachments/241795.pdf
The above is their last fuel hedge disclosure in August. If you check the bottom two lines to the right you'll see that on a net basis after costs they are ~ U.S.$20m in credit this year from hedging but that was after purchase costs of options totaling a whopping ~ U.S.$16.5m. How many staff are on significant six figure salaries running this programme as well ?
Good they got it right this year but last year they got it horribly wrong, (as did almost everyone else when oil collapsed in price), but I guess my point is if you're incurring direct hedging costs of the magnitude noted above plus unknown staff costs how is it possible to win from this in the long run ?
My analysis shows on average AIR carries at any one point in time ~ 2 months passenger sales of forward bookings. Given forward bookings aren't on average that far out maybe they'd be better to simply "wing it" when it comes to aviation fuel costs and save themselves truck loads of costs every year ?