A new series of podcasts from Airline Economics speaks to figures from the commercial aviation finance and leasing industry, about the emerging issues in the aviation industry.

In the first of the Insights Series of podcasts, Aaron Woolner, senior reporter Airline Economics magazine, speaks to Elise Weber and Matthew Tringham, about Skytra – a wholly-owned subsidiary of Airbus, which is developing a series of indices and derivatives to enable aviation industry players to manage the risk of ticket price volatility.

In her 15 year career within Airbus, Weber has held various international management roles in communications, performance management, strategy and business development. Tringham has been working in the aviation industry since the 1990’s, first at an airline before starting at Airbus in 2004 as an Aeronautical Engineer developing new Aircrafts. He then went on to work in a variety of management positions both in Europe as well as India and China. Tringham has worked in business development and strategy since 2014 where he led the development of a number of major new projects before establishing Skytra alongside Weber.

During the podcast Weber explains the thinking behind Skytra development and the key problems that airlines face in terms of revenue visibility, with earning volatility an issue, even in normal times. “Our value proposition is about making these revenues less volatile with the help of new instrument that are based on our Skytra prices indices , this means in future airlines will be able to hedge both their fuel and their revenues,” she says.

Weber says the COVID 19 pandemic has highlighted aviation’s need for more risk-management tools, while Tringham said that the current “interesting times”, means that all normal market dynamics have changed with revenues and pricing move down markedly worldwide. This occurred first in intra-Asia in January, then Asia long-haul to both European and North America before finally both those region’s domestic market saw a decline. US domestic travel was the final the final market to be hit in March – but there was an exception to the trend, according to Tringham.

“One unexpected phenomenon on the long-haul market from Europe and US to Asia, was that we saw wave of reparations travel, where actually the pricing was much higher than normal and for certain carriers experienced higher revenues in the short-term.”