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Airline Financial Risk Management (Classroom, 4 days)


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About

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.

A Case of Change

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 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 priceforces. 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.

This course is available at IATA Training Centers, Regional Training Partner locations, and on-demand as in-house training, and is part of the IATA Finance Academy.

Course format

  • This classroom course provides 4 days (32 hours) of instruction delivered by an official IATA Instructor.
  • 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 Management and Professional
  • The recommended level of language proficiency is ICAO Operational Level 4 for courses in English or the equivalent level for other languages.

Next class


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

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

Download the course outline

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.

Additional information

About IATA Classroom Training
We train more than 10,000 aviation professionals annually through our global network of IATA Training Centers, Regional Training Partners, and in private in-house sessions. Our 300+ classroom courses are developed using IATA’s unique industry insight and delivered by IATA Instructors, experts in their fields. More

Further training
Graduates of this course can apply for the Harvard ManageMentor© (HMM) distance learning program at a special graduate price.

Subject areas

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