Air China reports $454 mn in fuel hedge contract losses: report

SHANGHAI: Flag carrier Air China said Saturday it was facing fuel hedging contract losses of up to 454 million dollars at the end of October as global oil prices tumbled, state press said.

In a statement to the Shanghai stock exchange, the airline said it was facing fair value losses on fuel hedging contracts of about 3.1 billion yuan (454 million dollars) as of October 29, Xinhua news agency said.

But the hedging contracts have not caused any actual cash losses and the actual loss would depend on future movements in oil prices and adjustments of fuel hedging positions, it said.

Earlier the airline, also listed on the Hong Kong stock exchange, said it had booked a loss of 1.94 billion yuan in the third quarter due to weak travel demand.

Crude oil prices have plunged around 66 percent from a peak of 147.27 dollars per barrel on July 11 on concerns over a deep and prolonged recession of the global economy.

State media has reported that Air China, China Eastern Airlines and China Southern Airlines, the nation's three major state-owned carriers, were seeking government cash injections to cope with high costs and weak demand.