Study On Risk Management And Cost Control Of Hedging Airline Oil Price

Air transport enterprises due to its own characteristics, capital-intensive, energy dependence, and low profit margins. Costs caused airlines vulnerable to the effects of fluctuations in the jet fuel market. According to statistics, in the operating costs for airlines, jet fuel costs have occupied a high percentage. With the recent spike in oil prices, international aviation fuel to run high, caused by airlines and the high costs and reduced profits, or even cause loss, and thus affect the results of operations of the airline. Therefore, the control of the cost of jet fuel, airline operators in front of a pressing problem. Throughout the world aviation industry, most of the airlines in developed countries using a variety of financial derivatives, hedging way to deal with jet fuel price change, in order to achieve cost risk control as a way to improve the core competitiveness of enterprises force. With China’s aviation enterprises to the market and internationalization of China’s aviation enterprises also began using various oil market financial derivatives to control costs, hedging risk. However, due to the limitations of the policy, institutional, experience, talent, hedging transactions on major issues, causing huge losses to some airlines, news reports disclosed it. In this case, the airline operators must not unworthy, but should depart from the height of the business strategy, the development of relevant cost control measures, regulatory means of trading in oil derivatives trading on the market and behavior, so as to achieve control costs and improve the core competitiveness of enterprises, promote the purpose of the business performance.In this paper, the China Airlines jet fuel cost control strategy for the study, using a variety of research methods, through the analysis of the condition and problems of the Chinese aviation enterprises, from the point of view of the jet fuel price risk management related to cost control theory based on enterprise from the impact of fuel prices, fuel hedging strategies and the impact of the jet fuel consumption jet fuel saving strategies should start to seek the best solution to control fuel costs.Firstly, using a literature study, reviewed the literature and theory on airline fuel costs control. And then combined with the actual operations of the domestic airlines, more comprehensive, in-depth investigation and analysis of the status of domestic airline fuel costs control, and learn from developed countries by examining Airlines jet fuel cost control experience, multi-angle explore ways to solve China’s aviation The company jet fuel cost effective means of control problems. Finally, we propose suitable for China Airlines jet fuel cost control strategy recommendations.