China Southern Airlines earned US$6.28 million from jet fuel hedging contracts last year while some other leading carriers reported losses because of sharply fluctuating oil prices.

The nation's largest carrier stopped all hedging contracts in September on concerns that oil prices may keep falling, a spokesman from China Southern told Shanghai Daily yesterday.

Oil and jet fuel prices have fallen to 2005 and 2006-levels with crude oil about US$40 a barrel and jet fuel prices 25 percent to 30 percent higher. This is less than half the US$180-a-barrel peak in July.

China Eastern Airlines, the country's third-largest carrier, said its cash losses on settling jet fuel hedging contracts reached US$420,000 in November and further losses will occur because of the declining oil price in December.

Air China Ltd, the nation's largest international carrier, has said its fair-value loss on contracts widened to 3.1 billion yuan (US$454 million) from 1 billion yuan in the third quarter. Shanghai Airlines had suffered hedging losses of 98 million yuan by the end of October.

The Guangzhou-based China Southern flew 59.81 million passengers last year, rising 5.1 percent from a year earlier, and delivered 870,000 tons of cargo, almost the same as 2007's volume.

Its passenger volume accounted for 36.6 percent of the country's total.

(Shanghai Daily January 6, 2009)