Originally Posted by
2SWEETAU
from what i understand, LOT bought 2 years worth of aviation fuel and since the prices of crude has fallen so much and their currentcy has taken a 1/3 of the value wiped, it really not a operational problem that has got them in this position just bad decisions during the WFC.
Other airlines hedged at the peak too - they just pass their decision on the customers in form of YQ.
If the fuel prices hadn't fallen then they would post the loss - since LO would have to buy the fuel at market price anyway.
Local currency going down has a marginal effect in my opinion - YQ is calculated in USD, foreign fares bring in more revenue in PLN neutralizing the lower income from decreasing local passengers.
The problem is the low load factor - but as history proved was able to lose money on routes even with the highest load factors, so you never know.
Edit: I don't believe LO will go under though. The government will find a way to inject some cash in one way or another to keep them afloat.