Airbus set to drop plans for derivatives trading market

Airbus is set to ditch its planned derivatives market for the airline industry to hedge against highly volatile ticket prices as the European aircraft manufacturer moves to conserve cash. The company is reviewing plans to launch its full-scale futures and options market, called Skytra, that had been due to launch before the end of the year, said two people involved in the discussions. It will instead focus on licensing specialist data and indices for the air travel industry, the people said, in a significant scaling back of the two-year project. The decision comes as Airbus seeks to cut investment in all but core businesses in response to a sharp drop in demand for new aircraft. The contracts were intended to track the daily changes in the price of air travel and help airlines hedge with the volatility of fares. Even before its launch, many executives in the derivatives industry had questioned Airbus’s decision to set up its own trading venue, a far step from its main business of making planes. Typically, companies looking to hedge their exposures to changes in interest rates and fuel prices use banks or exchanges such as CME Group and Intercontinental Exchange.<br/>