A-I to hedge ATF overseas

Air-India is planning to hedge its aviation turbine fuel (ATF) exposure in the global markets by third quarter of this financial year. It will hedge between 10 to 15 per cent of its ATF requirement.

It is the only airline that has been permitted by the government to hedge its exposure so far.

"In the wake of spiralling oil prices, we are planning to start fuel hedging during the third quarter of this fiscal. We have appointed counter parties abroad who can hedge for the airline," said S Venkat, company secretary and general manager (public relations).

Jet Airways and Air Deccan have also submitted their plans to the government in regard to hedging but have not got the nod to do so.

Air-India has secured necessary approvals from the Reserve Bank of India (RBI). It has appointed banks including Citibank, Matsui Bank of Japan and Standard Bank of UK to facilitate hedging process.

The airline is required to comply with the norms of the International Swap Dealers Association (ISDA) and formulate the risk management policies before entering into hedging.