17 May, 2022, London – Skytra, the wholly owned subsidiary of Airbus, has teamed up with S&P Global Commodity Insights, the leading independent provider of information, analysis and benchmark prices for the commodities and energy markets, to create a new series of airfare-to-jet-fuel price spread indices.
The collaboration will allow for combining Platts benchmark jet fuel price assessments with Skytra’s unique air travel price indices into a new index family, providing an unrivalled level of insight to measure the profitability of the air travel industry.
Powered by Skytra’s data management and the independent Platts price assessments from S&P Global Commodity Insights, the planned new price comparison indices will provide increased transparency for the aviation market, enhanced innovation and provide new insights to help the sector manage its revenue risk.
Matthew Tringham, Skytra Co-Founder and Chief Strategy and Product Officer, said: “As the aviation sector recovers from the effects of the pandemic and seeks innovative ways to rebuild balance sheet strength, the ability to hedge major inputs and operating margins would bring enormous benefits to airline treasury teams and offer investors a new insight into industry performance.”
“The pandemic has proved that the aviation sector needs new tools to rebuild its strength. By joining forces with S&P Global Commodity Insights, we aim to do just that, by offering the aviation sector a new, transformative way to foresee risk and navigate any future potential crises.”
David Martinez, Head of Product Management, Market Reporting & Trading Solutions, at S&P Global Commodity Insights, said: “We are always looking to power the markets of the future, so teaming-up with Skytra to provide this new family of indices is something we are hugely excited by. We welcome Skytra’s recognition of the value of Platts global jet and sustainable aviation fuel price assessments, and the transparency they bring to the marketplace. Our combined data should better enable the aviation sector to traverse uncertainty and growth opportunities with greater efficiencies.”
Skytra was co-founded by Elise Weber and Matthew Tringham in a bid to strengthen the air travel industry with new resources: unique data and market insights to support strategic decisions and regulated air travel price indices for revenue risk management. Skytra is authorised as a Benchmark Administrator by the UK FCA and publishes the world’s first regulated air travel price indices. These indices will assist airlines, lessors, travel agents and companies to protect against ticket price volatility and hedge revenue, amongst other applications such as parametric insurance policies and floating lease rates.
S&P Global Commodity Insights is a division of S&P Global (NYSE: SPGI). S&P Global is the world's foremost provider of credit ratings, benchmarks, analytics, and workflow solutions in the global capital, commodity, and automotive markets. It helps many of the world's leading organisations navigate the economic landscape so they can plan for tomorrow, today. For more information visit https://www.spglobal.com/commodity-insights.
Skytra Ltd. is a wholly-owned subsidiary of Airbus based in London. Established in 2019 to reinvent risk management for the air travel industry, Skytra serves as an FCA regulated benchmark administrator for the world’s first air travel price indices known as the Skytra Price Indices. Skytra works in close partnership with air travel and financial market experts to continue to improve risk management for the benefit of the entire air travel industry. To learn more, visit http://www.skytra.com or follow us on LinkedIn and Twitter @SkytraMarkets.
Emma Mackenzie, Skytra
Callum Attew, Boldspace
For example, the airfare-to-jet-fuel price spread indices would show that flying internally within Europe and North America has been less profitable post-pandemic when compared to pre-pandemic levels.
In Europe, the pre-pandemic (2013-2019) average was $5000 in profits per ton of fuel burnt compared to just $3000 in February 2022. This drop of -40% represents a historic low and demonstrates how heavily affected margins have become since the pandemic. This situation is mirrored in North America where profitability fell from an average of $3500 pre-pandemic, to $1750 in February 2022, which is a -50% decrease. The Skytra Price Indices demonstrate that ticket prices are increasing, a strategy that will help airlines to remain profitable.
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