Does hedging make economic sense for American Airlines?

Authors

  • Bruno Lucio Vieira Ohio University.
  • José Guilherme Chaves Alberto Fumec University.
  • Henrique Cordeiro Martins Fumec University.
  • Alex Moreira Fumec University.

DOI:

https://doi.org/10.5007/2175-8069.2014v11n23p141

Abstract

This study evaluates the impact of hedging in company value by analyzing how American Airline consolidated group’s market value is impacted by changes in the level of next year’s fuel needs hedged and total value of its outstanding agreements from 1989 to 2010. A descriptive and qualitative research methodology was used. Secondary data was collected for a case study.The results indicate that it makes economic sense to hedge fuel costs. However, investors have negatively valued increases in hedge positions. 

Author Biographies

Bruno Lucio Vieira, Ohio University.

Holds a Masters degree in Master in Financial Economics - Ohio University (2011). Has experience in the industry of financial data, with emphasis on data fundamentalists Brazilian companies.

José Guilherme Chaves Alberto, Fumec University.

Graduated in Business Administration from Management Sciences UNA College (2000), Specialization in Statistics from Federal University of Minas Gerais (2011) and Master in Management of International Business from Zaragoza University/ Spain (2003). He is currently a student of PhD in Business Administration from Fumec University , an assistant professor at the Pontifícia Universidade Católica of Minas Gerais and  UNA University Center and a professor of Post-graduation at  IEC PUC Minas. He has experience in Capital Markets and Derivatives.

Henrique Cordeiro Martins, Fumec University.

Doctor of Business Administration from UFMG and Birmingham School, England. Master of Engineering from UFMG. MBA in Finance and Capital Markets from IBMEC.Professor of the PhD program at the FUMEC University. Editor-in-Chief of Faces Journal.

 

Alex Moreira, Fumec University.

Doctor of Social Sciences : Sociology PUC São Paulo (2009), is also Master in Management : Information Technology Fundação João Pinheiro (2000 ), Education Specialist for UEMG (1990) and Bachelor Degree , PUC Minas (1989 ). Teacher for 20 years, currently serves as Coordinator of the Course of Technology in Teaching and Photography Programs Strito Sensu and graduation from the University WSCF. It is also a Professor Adjunct at the Pontifícia Universidade Católica of Minas Gerais and researcher at the Institute of Applied Technology.

References

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Published

2014-08-26

How to Cite

Vieira, B. L., Alberto, J. G. C., Martins, H. C., & Moreira, A. (2014). Does hedging make economic sense for American Airlines?. Revista Contemporânea De Contabilidade, 11(23), 141–154. https://doi.org/10.5007/2175-8069.2014v11n23p141

Issue

Vol. 11 No. 23 (2014)

Section

Articles

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