Wizz Air Holdings PLC on Thursday said it will return to a systematic jet fuel hedge policy to limit its exposure to volatile crude oil prices.
The Budapest-based budget airline will now mirror the hedge coverage levels of its main peers in financial 2024 and put additional jet fuel price caps in place for the second half of financial 2023.
The policy will be rolled forward quarterly, with coverage levels over time reaching between 65% for the first quarter of the hedging horizon and 15% for the last quarter.
During the earlier phases of the Covid-19 pandemic, Wizz Air moved to a no-hedge policy in order to avoid hedge losses. However, given the ongoing volatility of commodity prices, Wizz Air decided to reinstate a hedging policy.
Chief Executive Jozsef Varadi said: ‘To fully benefit from our key sustainable competitive advantages, Wizz Air will return to neutralizing fuel price as a competitive differentiator. This will allow us to focus on what we are best at - attracting consumers into our franchise at the lowest fares versus competition, enabled by lowest cost, operated by the youngest fleet in a fast growing region.’
Shares in Wizz Air were down 5.2% at 1,876.20 pence on Thursday in London.
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