Smart Airlines Are Saving Billions Thanks To Oil Price Hedging

Commodity price hedging is a popular trading strategy frequently used by oil and gas producers as well as heavy consumers of energy commodities such as airlines to protect themselves against market fluctuations. During times of falling crude prices, oil producers normally use a short hedge to lock in oil prices if they believe prices are likely to go even lower in the future, while heavy consumers like airlines do the exact opposite: Hedge against rising oil prices which could quickly eat into their profits. Nearly all of an airline's costs are…