Lufthansa seeks a clearer view

How should an airline manage forex and interest rate risk? Lufthansa’s corporate treasury is leading the way as it plans major changes in hedging strategy. Nicholas Dunbar reports

In today’s risk-aware times, the airline sector seems particularly exposed. There are the ever-present security threats, an exposure to highly volatile commodity prices and fierce competition for customers, particularly in the low-cost carrier arena.

As Europe’s third biggest airline, Lufthansa has faced these risks reasonably well. Unlike some other airlines, it has not been forced to add a surcharge to ticket prices in the wake of recent oil price spikes. And despite the recent growth of no