Airline hedging falling short of best practices

Fuel hedging programmes at many airlines fall short of best practices, according to a new industry survey. Alexander Osipovich finds out how they are going awry

Over the past two decades, the commercial aviation industry has largely embraced the use of hedging. The vast majority of carriers in North America and Europe, as well as many airlines in emerging markets, see hedging programmes as a crucial tool for managing the volatility of jet fuel prices.

But as hedging has become the status quo, questions have arisen about whether airlines are doing it effectively. Some critics ask whether the transaction costs of using derivatives are worth the benefits