Asian airlines' fuel-hedging losses down to collar strategies

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A major contributor to the large fuel-hedging losses suffered by Chinese and Taiwanese airlines for 2008 were seemingly collar strategies - the purchase of call options and simultaneous sale of put options. But some Asian carriers, such as Malaysia's Air Asia and Guangzhou-based China Southern Airlines, profited from their fuel hedges for last year.

Many Asian airlines, like their counterparts elsewhere, suffered substantial losses on hedges put on before the sharp oil price drop in December. The

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