A new study finds that nearly half of commercial airlines are not utilizing hedging and risk management strategies that accurately reflect the company’s tolerance for risk and corporate objectives, indicating that many airlines have yet to adopt energy hedging and risk management best practices.
The State of Airline Fuel Hedging & Risk Management, a report released today by Mercatus Energy Advisors and Airline Economics, highlights the findings of a study conducted to reveal the current fuel hedging and risk management practices of commercial airlines.
Key Findings of the Study
• 39% reported that their fuel hedging programs do not utilize hedging strategies which accurately reflect the company’s risk tolerance and hedging goals
• 36% indicated that their fuel hedging program is deemed a success if it mitigates cash flow volatility
• 61% stated that either a hedge committee or their board of directors are responsible for making hedging and risk management decisions
• 50% said that they have hedged less than 40% of their anticipated fuel consumption for the coming 12 months
• 76% indicated that they have an official fuel hedging and risk management policy
“In the current environment, where uncertainty and volatility have become the norm, it is vital that commercial airlines employ a sound fuel hedging and risk management program. A proper hedging program will not only allow them to survive the most challenging of times, but also to excel in the best of times as well,” said Mike Corley, president of Mercatus Energy Advisors.
The complete results of the study can be downloaded via the following link: http://www.mercatusenergy.com/
About Mercatus Energy Advisors:
Mercatus Energy Advisors is the leading, independent energy hedging & risk management advisory firm serving energy consumers and producers across the globe.
Learn more at www.mercatusenergy.com
About Airline Economics:
Airline Economics is the foremost global publication dedicated to news and analysis for aircraft owners, operators and lessors and everything that affects the day-to-day running of their business.
Learn more at www.aviationnews-
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Mercatus Energy Advisors is the leading, independent energy hedging and risk management advisory firm. Learn more at www.mercatusenergy.com.