Odd Lots · Friday, October 2, 2026
Airlines can employ "revenue hedging" by leveraging fuel surcharges on tickets to offset the risk of volatile jet fuel prices, according to David Kang, former group treasurer at Qatar Airways. This strategy treats the ticket price, including the surcharge, as a product that can be hedged, similar to how an oil refinery hedges its output.
“So you have consumption hedging and you have revenue hedging. So that's how we came, you know, we really extrapolate out the curve. We, you know, we sat down for a couple of weeks and really brainstormed and we came up with this.”
“So in that ticket, we have a product and we have revenue and that's where you do revenue hedging. So you have consumption hedging and you have revenue hedging.”
“So the idea was that because the airline was in fact long oil, because you could charge higher prices when oil prices went up. that you could use that to buy a certain option strategy that would have been riskier without the extra operating revenue. Is that what you mean?”