Energy Hedging & Risk Management Case Studies

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Commercial Airline Improves Results of Jet Fuel Hedging Program

Client

A publicly traded, commercial airline

The Situation

The client’s management team engaged us to perform an in-depth review of the company’s jet fuel hedging and risk management program.  The company’s board of directors, management team and treasury department were keen to have this review conduced as there were concerns that their hedging and risk management program was not as robust as they believed it should be, despite having performed fairly well in recent quarters.

Our Role

  • Conducted several meetings during which the CEO, CFO and treasury staff were interviewed about their fuel hedging policy, processes, goals and objectives
  • Performed a multi-phased detailed review of the company’s fuel risk management policy, manuals and practices
  • Prepared an in-depth report identifying ways in which the company could improve their fuel hedging and risk management program
  • Providing the board of directors, management team and treasury staff with ongoing, fuel hedging and risk management advisory services

Results

By implementing the changes suggested by Mercatus Energy Advisors, the client has been able to improve the quality of its fuel hedging and risk management policy, establish a more effective fuel price forecasting and fuel price risk management framework and improve the overall efficiency and results of its fuel hedging and risk management program.