What are the arguments for and against an airline company hedging its fuel risk?Based on this, would you advise Ryanair to continue on hedging its fuel price risk?
Corporate Finance fuel price risk: Should airlines hedge out their fuel price risk?
The recent past is littered with examples of airlines that have lost significant amounts on hedging out their fuel price risk. The article by Rivers (2012), available below as core reading, describes many of these causalities.This has led many to question whether hedging really adds value for an airline.Read the articles suggested below that look at the problem from slightly different angles but come up with a similar conclusion.
What are the arguments for and against an airline company hedging its fuel risk?Based on this, would you advise Ryanair to continue on hedging its fuel price risk?Write a maximum of 750 words answering the questions above