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21-04-2020, 10:17 AM
If they were hedging according to their "projected needs", I don't think SIA Mgt were gambling per say like SCM's FOREX scandal about 13-14 years ago. The only difference is that their real needs may drastically change now due to a black swan event called Covid-19.
When everyone is rar-rar about the future - The success of Jewel Changi, Tokyo 2020 Olympics, the completion of T4 and the announcements for T5 etc - it is not easy for any dissenting pessimism. One could jolly well imagine what could have transpired in the executive meeting if the hedging guy presented his conservative 2 year hedging plan and only to get questioned by the boss (normally the alpha male is the CEO and everyone else nods with a smile on the face) why shouldn't we get more aggressive since times are rollin' good.
It would be good to judge a decision from the decision making process rather than the end result. In an alternate reality, SIA would be rollin' big profits if a ME war broke out or a re-elected Trump closed the lid on Iran.
@brattzz
I don't think airlines can take physical delivery of crude oil. Their only functional usage is kerosene, which is produced after refined. So the only takers are refineries or each country's stratgic reserve. Just for the joke, the better deal for locals might be to try to smuggle cheap R95 petrol from Malaysia at ~40cents/liter and store it up somewhere.
When everyone is rar-rar about the future - The success of Jewel Changi, Tokyo 2020 Olympics, the completion of T4 and the announcements for T5 etc - it is not easy for any dissenting pessimism. One could jolly well imagine what could have transpired in the executive meeting if the hedging guy presented his conservative 2 year hedging plan and only to get questioned by the boss (normally the alpha male is the CEO and everyone else nods with a smile on the face) why shouldn't we get more aggressive since times are rollin' good.
It would be good to judge a decision from the decision making process rather than the end result. In an alternate reality, SIA would be rollin' big profits if a ME war broke out or a re-elected Trump closed the lid on Iran.
@brattzz
I don't think airlines can take physical delivery of crude oil. Their only functional usage is kerosene, which is produced after refined. So the only takers are refineries or each country's stratgic reserve. Just for the joke, the better deal for locals might be to try to smuggle cheap R95 petrol from Malaysia at ~40cents/liter and store it up somewhere.