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
The week on Risk.net, July 7-13, 2018Receive this by email