TRANSFORMING INTO A GLOBAL CHAMPION
EF
RISK MITIGATION
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FUEL AND CURRENCY
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Fuel hedging strategy designed to lock in booking curve profitability
Use of call options protects against short-term price spikes while allowing to
participate 100% in fuel price declines
Foreign exchange risk strategy is to cover 70% of net U.S. exposure on a
rolling 18-month basis using derivatives and U.S. cash reserves
U.S. dollar revenues together with foreign currency net revenues converted to U.S.
dollars essentially cover non-fuel U.S. dollar costs
- Fuel expenses are a significant U.S. dollar requirement but the impact in Canadian
dollars is mitigated by a correlation between the Canadian dollar and the price of
crude oil
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Impact of hedging benefits cash flow but hedging results reported in non-operating
income
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