7 Questions Corp Travel Buyers Should Ask About Airbus’ New Way to Hedge Volatile Airline Tix Prices
Skift Take
Airbus' decision to launch a new product in the middle of a crisis might seem strange, but travel buyers, corporations and airlines will likely be receptive to anything that can help insure them against suffering such big losses again.
It's common for airlines to hedge against volatility in fuel prices and foreign exchange rates — soon they'll be able to manage revenue risk and pricing volatility in a similar way, using a trading system that's being developed by Airbus.
London-based Skytra, a wholly owned division of Airbus, is building a financial product to allow the trading of cash-settled futures and options contracts based on custom-made indexes designed to represent airline revenues.
And corporate travel agencies as well as corporates will be able to place their bets too — a development that has the potential to shake up the managed travel distribution landscape.
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Hedging typically involves two sides. Initially, Skytra envisages airlines on the selling side of the trading system, with business-to-business travel agents and large multinational corporates on the buying side. As the system de
