Jet fuel is a major operating expense of an airline. Consider two airlines: Luna hedged fuel at US$50 per barrel, while Solis buys fuel on the spot market. The current spot price is US$70 per barrel. How should the difference in fuel expense affect their pricing and capacity planning?

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The Answer of Jet fuel is a major operating expense of an airline. Consider two airlines: Luna hedged fuel at US$50 per barrel, while Solis buys fuel on the spot market. The current spot price is US$70 per barrel. How should the difference in fuel expense affect their pricing and capacity planning?

Jet Fuel Is a Major Operating Expense of an Airline