Airbus recently created Skytra Ltd, and plans to launch in late 2020 a ticket price commodities trading scheme for airlines.
It will act as a complex hedging system allowing airlines to balance more effectively their costs by predicting ticket prices in six key markets.
Tickets are normally purchased – some 85% in fact – just five weeks before departure date. By tracking costs and predicting prices, likely events and disturbances airlines can predict the highs and lows as any commodity trade does and balance their losses based on a cost per passenger kilometre (they will in effect trade in CPPKM).
The global trading scheme plans to go into effect in late 2020 in the U.K. and will be regulated by the FSA.
Is this a good thing? That remains to be seen. Someone will no doubt work out how to profit from it but hedging doesn’t always work well.
Fuel hedging ended up costing British Airways a fortune when it bought future supply some two years ahead at what ended up being a higher price than it was when delivered, so they paid more, a lot more.
American Airlines on the other hand saved a huge amount of money buy buying fuel low and when delivered it should have cost some 20% more.
Delta didn’t hedge at all and ended up breaking even, partly on the basis it owns its own refinery. Hedging is only as good as your ability to predict events. Good luck with that!