Analysis Of The Fuel Hedging Strategy In Aviation Enterprises

Since 2000,the constantly rising international oil price has become a heavy burden of Chinese rapid economic development,especially for fuel consumption enterprises.In order to improve the profitability of the industry,reducing and stabilizing fuel costs has become an important goal of various companies in the aviation industry.In addition to technological innovation,airlines generally seek financial solutions.The best solution for stabilizing prices is to choose hedging tools based on hedging principles.In the fuel price upward period,some domestic and international airlines use hedging scheme to control the fluctuation of cost,and obtain a good income.In 2008,international oil prices slid from $147 to $40/barrel,fuel costs substantially reduced,for the airline is a major positive,but because of some domestic aviation hedging business generated huge losses,and Southwest Airlines in the same hedging operations under the condition of maintaining steady income.This example shows that hedging is a double-edged sword,stabilize prices will determine the correct price cost,stable overall income;if the direction is wrong,the futures contract will be swallowed up by the main business to bring the meager profits,even as the company caused huge losses.In this paper,aiming at the stability of airline fuel prices,profits from the domestic and foreign advanced cases and related strategies on the basis of Air China Shandong Airlines fuel hedging program design,mainly adopts the theory of value at risk model of risk control field.The first part introduces the background and significance of domestic and foreign literature,provide an effective basis for the further study of this article;the second part summarizes the development of hedging theory,laid the theoretical foundation of the thesis;the third part from the perspective of practice,study the domestic and international airlines fuel hedging case,in order to learn from the experience Southwest Airlines and Eastern Airlines in the success of the strategy,design direction for the hedging strategy of Shandong;the fourth part is the design of fuel hedging scheme of Shandong airlines,the most central part of the paper.In China in terms of hedging do the best air for reference,according to the specific situation of Shandong Airlines hedging strategies above are analyzed and the specific improvement of risk control,put forward the risk prevention and control measures;the fifth part analyzes the research conclusion and puts forward relevant policy suggestions.The results show that the application of hedging strategy can achieve good results in the fuel cost risk control of China's aviation industry,and is an effective tool to stabilize the volatility of fuel costs.Flexible use of transaction risk control,financial risk control and other financial risk prevention and control measures,to ensure the crucial role in the whole operation process,the implementation of control measures directly affect the efficiency of hedging.