Risk Management In The Airline Industry Essay Example | Topics and Well Written Essays - 1000 words

Risk Management In The Airline Industry - Essay Example This essay compares two worldwide famous airline corporations such as British Airways and EasyJet. At the end of 2008, the total revenues of British Airways earned were 15,012 million dollars. As opposed to British Airways which is a larger corporation and a major fleet carrier, EasyJet is the largest low fare airline for leisure and business passengers, operating all over Europe. In both airline companies, the element of risk and insurance policies are highly managed. This essay focuses on ways that these companies use to reduce losses and gain certain profits. The main aspects of risk, that are discussed in this comparative essay are: the single loss of aircraft or its part, a collision between two aircraft, terrorist acts, economical crises, pandemics and changes in government regulation or laws. Insurers of the big airline companies, such as British Airways need to plan for such events and to create a special insurance funds. That is why risk managment is highly important issue these days. This essay also contains some tables on fuel pricing and currency rates throughout recent years and a risk management strategy, that provides the airline with protection against sudden increases in oil prices. In conclusion of this comparative essay, British Airways and EasyJet are also analyzed on their complicated strategies to managing changeable currentsy rates and fuel pricing, including the increasing of ticket pricing, foreign exchange conversions and hedging to manage these risks.