Airline Financial Risk Management (classroom)

CLASSROOM

About the course

4-day (32 hours) classroom course

This joint IATA/ERAU (Embry-Riddle Aeronautical University) course will provide you with a deeper understanding of the key economic and financial risks to which airlines are exposed. It will impart how each risk affects the business, both in terms of the direction and the size of the effect. Types of risks covered in detail in this course include fuel prices, foreign exchange, interest rates, inflation, and credit. Today’s aviation business is much more competitive with business models that range across the spectrum. The competitive and transparent nature of the business often results in thinner profit margins. Thus, there is little room for error when it comes to managing its financial aspects. In order to compete effectively, airlines must understand and manage all the risk factors that can impact their financial performance, including financial, economic, political, and data breaches, just to name a few. This course will impart knowledge not only on specific risks airlines are exposed to but also on how these risk factors affect and move in relation to each other. For example, foreign currency exposure (FX) and fuel prices are related to each other. To simply look at FX risk in isolation would omit the impact of fuel price forces. The ultimate goal of risk management is to respond to risks and exposures in a way that minimizes their impact on the volatility of the airline business. This course will offer you a networking opportunity with peer professionals, and a number of technical tools and skills that will allow you to quantify the aggregate and net risks as well as assess their overall impact on the business.

Course Code: TALF-94

Course format

• This classroom course provides 4 days (32 hours) of instruction delivered by an official IATA Instructor.
• Take this course at an IATA Training Center, Regional Training Partner, or on-demand as in-house training.
• Student performance will be based on an assessment.

Prerequisites

• Participants should have at least 1 to 3 years of experience in the aviation industry.
• Recommended level is Intermediate and Advanced.
• The recommended level of language proficiency is ICAO Operational Level 4 for courses in English or the equivalent level for other languages.

How to register

• When you click the Register button, you will be directed to log in to your Training Account.
• Register early and save up to 25% at our Training Centers! Please read the Terms and Conditions for the early bird discount.

In-house training

To arrange in-house training for your company, please complete the in-house training request form or contact the Training Specialist in your region.

What you will learn

Upon completing this course you will be able to:

• Identify the key economic and financial exposures that airlines face, including fuel prices, FX, interest rates, inflation and credit
• Use appropriate techniques for quantifying and ranking the exposures
• Quantify the relationship, if any, between key exposures and use that information to make decisions about hedging:
  • Articulate the five critical decision points for financial instrument hedging
  • The objective of hedging
  • How far out from the exposure the airline should hedge
  • How much the airline should hedge
  • Which instruments the airline should use
  • The hedging products the airline should use
• Determine the operational levers the airline should use in combination with financial instruments, and the extent to which they should be used

Course content

The key topics that are covered during this course include:

• Key airline exposures
• Airline fuel costs
• Foreign exchange exposure
• Inflation and interest rate exposure
• Credit risk

Activities

• Networking and discussions with the course participants
• Readings
• Group assignment

Who should attend

This course is recommended for:

• Senior analysts
• Airline management with 1 to 3 years’ experience in the Treasury Risk Management area
• Airline professionals with aspirations to work in this area and aviation analysts who wish to have a deeper understanding of airline hedging

Certificate awarded

A co-branded IATA / ERAU Certificate is awarded upon successful completion of the course and final examination.