Hong Kong's Cathay Pacific Airways has seen paper losses from fuel-hedging almost treble to
HK$7.6 billion (£646.5 million) in two months as it bought long-term fuel supply contracts at the top of the market before prices plunged.

Cathay's shares fell as much as 7.3% on the news.
The losses, including contracts running up to 2011, spiked between October and the end of the year as fuel prices tumbled in line with declining oil costs.

The airline's first-quarter bookings are also “markedly down” from last year due to the global recession.

Many carriers across the world have been caught on the wrong side of hedging contracts as oil prices plunged after hitting a peak in July, although British Airways has increased hedging recently to take advantage of the fall in oil prices.

BA has also hedged its exposure to the dollar for the first time, buying an estimated $800 million (£540 million) before sterling's recent slump.
So far this year, fuel prices have climbed 28% in Singapore trading, hitting $69.20 yesterday.

That may allow Cathay Pacific to recoup some of its unrealised hedging losses.

But the airline faces a grim set of 2008 results that it has acknowledged will be “disappointing”. The carrier posted its first half-year loss in five years in the six months ended June.

Cathay Pacific has curbed capacity growth, offered staff unpaid leave and is to delay a new cargo terminal to cut costs amid the passenger traffic slowdown. This tumbled 9.7% in the Asia-Pacific region in November, compared with a 4.6% fall worldwide, according to the International Air Transport Association.