Austrian plans hedging programme

Austrian Airlines has unveiled a hedging programme with plans to hedge up to 20% of its annual kerosene requirement. Austrian Chief Executive Officer Alfred ?-tsch issued the following statement: “We have now begun to develop a staged hedging programme, in an effort to secure ourselves against fluctuations in the price of kerosene in future to a practical extent. Through the programme, we aim to hedge up to 20% of our annual kerosene requirement on a step-by-step basis. Where we did not previously have the balance sheet strength that is necessary to operate a hedging policy, we are now in a position to do so following the successful conclusion of our capital increase.”

The hedging programme will be implemented in stages. In these so-called ‘forwards’, Austrian Airlines will buy one-twelfth of its hedging requirement for each month in advance and at an agreed price, on a monthly basis for a period of one year, based on a total kerosene volume for 2007 expected to be around 770,000 tons. The first contract was concluded for a total amount of 12,000 tons kerosene which results in a monthly amount of 1,000 tons. With this programme the Austrian Airlines Group aims at building up a hedging position of 20% of the company’s fuel needs. The hedging programme will enable the Austrian Airlines Group to spread the risk in a more targeted manner and to level out, or stabilise, the medium-term kerosene costs. The cost of fuel is currently around 15 - 20% below its high point in 2006.