Air India starts fuel hedging

The carrier chose investment bank Citigroup as the hedging counterparty for its maiden trade.

The price of jet fuel, which averaged $1.14 a gallon in 2003–2004, stood at around $2.01/gallon at the start of March. Since fuel costs constitute almost 30% of Air India’s operating expenses, the carrier says it decided to manage this risk using a combination of contracts such as jet fuel swaps, options and collars.   

                                                        

The airline’s fuel bill

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: