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  Authors

Aadit Daphatary,Dr. Middi Appalaraju

  Keywords

Hedging, Derivatives, Crude Oil, Aviation Turbine Fuel, Proxy-hedge, Correlation, Regression.

  Abstract


This paper understands the concepts of derivatives, hedging and analyzes the Indian Aviation Sector in India. This paper reviews thirty published articles by renowned authors to further understand this field of research. This paper collects the data of Crude Oil prices, Aviation Turbine Fuel prices, Brent prices among others. This paper analyzes the data using models such as Descriptive Statistics, Correlation, Regression, GARCH Model, One-Way ANOVA Test, Unit Root Test, Co-integration and the Granger�s Causality test. The analysis provides desirable results and helps further interpretation and analysis. The results of the analysis also help develop good strategies for airline companies. This paper finds that Crude Oil Prices and Aviation Turbine Fuel prices are highly positively related whose correlation is almost perfect positive (0.98 correlation). The Crude Oil daily future prices do not show any effect of GARCH which shows that its volatility is not significant. The GARCH of Aviation Turbine Fuel prices is significant which helps the authors develop a strategy. Finally, the authors recommend that airline companies use Crude Oil as a proxy hedge for Aviation Turbine Fuel. Hedging using this proxy will help airlines reduce uncertainties and aid better financial planning and provide higher shareholder�s wealth.

  IJCRT's Publication Details

  Unique Identification Number - IJCRT2002217

  Paper ID - 192161

  Author type - Indian Author

  Page Number(s) - 1816-1823

  Pubished in - Volume 8 | Issue 2 | February 2020

  DOI (Digital Object Identifier) -   

  No Of Downloads - 1452

  Author Country - 560079, India, Bangalore, Bangalore, India, Management

  Publisher Name - IJPUBLICATION | www.ijcrt.org | ISSN : 2320-2882

  E-ISSN Number - 2320-2882

  Published Paper PDF : - http://www.ijcrt.org/papers/IJCRT2002217

  Published Paper URL: : - http://ijcrt.org/viewfull.php?&p_id=IJCRT2002217

  Published Paper PDF Downlaod: - download.php?file=IJCRT2002217

  Cite this article

Aadit Daphatary,Dr. Middi Appalaraju,   "A STUDY ON THE IMPACT OF OIL DERIVATIVES ON THE INDIAN AIRLINE INDUSTRY AND DEVELOPING A HEDGING STRATEGY TO HELP AIRLINES MAXIMIZE SHAREHOLDER RETURNS", International Journal of Creative Research Thoughts (IJCRT), ISSN:2320-2882, Volume.8, Issue 2, pp.1816-1823, February 2020, Available at :http://www.ijcrt.org/papers/IJCRT2002217.pdf

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