Oil futures is an investment to preserve value, which is more important for airlines. It is equivalent to giving an insurance to the airline. When the oil price rises, it can avoid risks and reduce the operating costs of enterprises. When oil prices fall, we can not hold oil positions, thus expanding corporate profits. Let's just say that this airline executive has little financial knowledge.

Enterprises can achieve risk procurement through hedging, so that the production and operation costs or expected profits remain relatively stable, thus enhancing the ability of enterprises to resist market price risks.

The basic way to expand data hedging is for enterprises to buy or sell oil commodity futures contracts with the same transaction amount and opposite direction in the spot market, and offset the actual price risk brought by the price change in the spot market at a certain moment in the future by hedging or liquidation compensation.

Of course, because the difference between spot price and futures price is objective, hedging cannot completely eliminate the risk, but replaces the greater risk with smaller risk, and replaces the risk of spot price change with the risk of spot price difference and futures price difference.

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