Philippine Airlines says airlines should consider hedging like they consider insurance

Philippine Airlines senior financial advisor Ian Reid, speaking at the CAPA Airline Fleet & Finance Summit 2016, said (03-Mar-2016) airlines should consider hedging like they consider insurance, with costs higher than the alternative but offering protection against shocks. Mr Reid noted: "With insurance you do it against a disaster, you don't go into an insurance policy thinking you're gonna make money. You're normally gonna pay more premiums than you'll get in claims," continuing: "It's the same things for interest rates or fuel, what you pay for hedges in the long term is more than what you would if you didn't hedge, but you can't afford not to insure yourself because a one-hit thing would kill you."