NBF: Fuel hedged in Q2Note from Tempo 1 : I already published the summary of the Nat bank pre results report for Q2. Here, you will find Interesting segment from inside the report about the fuel. Note that NBF is (with RBC) has the more documented reports for AC. NBF has a 28$ target for AC.
Fuel prices relatively stable
In Q2/24, the average spot price of jet fuel was C$1.01/liter, which is roughly in line with Air Canada’s realized fuel price in Q2/23, but we note that ~50% of AC’s fuel in Q2/24 was hedged at an average price of ~C$0.91/liter so the actual price paid in the quarter is likely lower than the average spot price. Air Canada’s fuel exposure is ~40% to the more volatile NY Harbor pricing, and we note that the average spot price for Gulf Coast jet fuel (the other major benchmark) in Q2 was C$0.98/liter. The current spot price of NY Harbor is C$1.04/liter while Gulf Coast is at C$1.02/liter. AC’s 2024 guidance is based on a C$1.03/liter fuel price assumption.