Physical supply and risk management for an airline
Vitol S.A. provided a key European airline customer with the tools it needed to maintain and improve its competitive position.
What we did:
- We agreed a global risk portfolio and hedge strategy to best meet the airline’s needs.
- Using Vitol’s risk management and trading teams, a best fit solution was developed to manage their price exposure.
- In partnership with Vitol Aviation’s expanding physical into plane supply business, opportunities were also developed to link fixed price solutions with the physical supply, when this was aligned with the airline’s risk management strategy.
- Vitol continues to work with this customer to ensure that the risk management solution remains fit for purpose and competitive.
- Vitol also continues to advise and offer solutions to help the airline manage the complex issues that arise from changing carbon emission legislation and their requirements for carbon credits, that help meet both legislative requirements and their corporate targets.
In Europe, Vitol Aviation has developed a number of carbon neutral, physical, into-plane supply solutions for this customer.
As a direct result of our relationship with this airline customer, they have reduced their exposure to oil market price volatility, improved their physical into wing pricing and their relative competitive position, and have now developed, in partnership with Vitol Aviation, a Carbon Neutral strategy to meet their immediate and future legislative requirements.