Odd Lots: How Airlines Hedge Higher Fuel Prices (Podcast)

AI Summary

The podcast examines how airlines use fuel hedging, including swaps and options, to manage volatile jet fuel costs. A former Qatar Airways treasurer discusses the challenge of rising prices amid wars affecting energy infrastructure.

Fuel is a huge expense for airlines, and even on a good day, jet fuel prices are pretty volatile. Throw in two major wars now effecting energy infrastructure, and fuel prices across the board are higher and higher. Airlines have long tried to manage this expense through fuel hedging, using things like swaps and options to hedge against future increases in the price of jet fuel. David Kang, former group treasurer at Qatar Airways, has firsthand experience hedging for a large carrier, and he tells