Use Of Derivatives In The Airline Industry

Abstract

This paper is about the use of derivatives such as futures and option used as hedging to reduce exposure to risk in the Airline Industry. The paper considers the way derivatives are used and undertakes primary research to determine whether there is a relationship between the use of derivatives, the level of profit, the level of liabilities and executive salaries. This paper uses regression analysis and a chi-squared test. The conclusion assesses the value of these tools to airlines.