The greatest expenses associated with airline operations

Among the greatest expenses associated with airline operations are fuel costs. In past years when fuel prices
were rising rapidly, airlines used hedging methods to reduce the procurement risks for sourcing fuel. The two
articles listed below highlight the experiences of three large airlines using different fuel hedging approaches.
Locate the articles in the Hunt Library and review them.
Liu, Chin-Yen A., & Jones, K.J. (2016). Integrated risk management on fuel hedging program: A case study
on Southwest and China Eastern airlines. Academy of Business Research Journal. 2, 74-85.
Manuela Jr., W.S., Rhoades, D.L., & Curtis, T. (2016, August). An analysis of Delta Air Lines’ oil refinery
acquisition. Research in Transportation Economics 56, 50-63.
Write a case study report to analyze the effectiveness and value of fuel hedging by airlines. In your case study report begin with a summary
overview outlining the main logistics issues facing the companies. Then, add detail and analysis by responding to the following topics and
Describe how each airline used procurement methods to hedge against fuel cost increases. Explain what internal and external
considerations are relevant to the airlines’ decision to hedge fuel prices?
Evaluate the relative effectiveness of each airline’s approach to hedging. Provide an analysis of which method was most successful and
describe what factors made the difference in success or failure of the hedging method.
Discuss the logistics lessons to be learned from the hedging efforts of the airlines. Do you think airlines, in general, will continue to use fuel
hedging in the coming months and years?

Sample Solution