The Application of Hedging in Enterprise Risk Management: The Case Study of Southwest Airlines


  • Yuyan Zhao
  • Jianwei Lu



Hedging, Risk Management, Option


In today's project of globalization and increasing market uncertainty, enterprise risk management has become one of the key factors for the survival and development of enterprises. As an important risk management tool, hedging is widely used in corporate practice. This article takes Southwest Airlines as an example to explore the application of hedging in enterprise risk management. Through a case study of Southwest Airlines, we aim to uncover how hedging can help companies reduce risk, stabilize operations, and improve profitability. At the same time, this paper also hopes to provide useful inspiration and reference for enterprise risk management.


ZHAO Xinxi, ZHAO Wusheng, XU Lujun. Research on the impact of hedging on enterprise value and business risk[J]. Modern Business, 2023, (17):133-136.

L.L. Johnson. The Theory of Hedging and Speculation in Commodity Futures[J]. Review of EconomicStudies, 1960,27 (3): 139–151.

Stein, J. L.The simultaneous determination of spot and futures prices [J]. American EconomicReview,1961,51(5):1012-1025.

H. Markowitz.1952 Portfolio selection-- efficient diversification of investments[M]. Yale University Press, 1959.

Jiang Meiyun. Research on the Risks and Countermeasures of Enterprise Futures Market Hedging[J]. Enterprise Economy, 2001, (11):138-139.

LI Yi-Zhi, ZOU Ping, XIAO Zhi-Ying et al. Application of value-at-risk method in risk assessment of futures market[J]. Journal of Central South University: Social Science Edition, 2001, 7(4):325-327.

Zhang, Hongru. Hedging[M]. Earthquake Publishing House, 2011.

Li Zhecheng. Research on fuel hedging strategy of airlines[D]. Southeast University, 2024.

Zhang Rong. Research on enterprise hedging risk management [D]. Xiamen University,2014.

Wang Li-Nan. Research on the application of commodity futures market hedging in enterprise risk management [D]. University of International Business and Economics,2016.

LI Xiaojin, SU Mingxiao, WANG Qiaoli, et al. Research on commodity price risk management based on risk utility function--Taking jet fuel hedging as an example[J]. Price Theory and Practice,2023(11):191-196.

JIA Weiying, CHENBaofeng. An empirical study of risk management motivation of listed companies in China based on the use of derivative financial instruments[J]. China Circulation Economy,2009,23(08):77-80.

Chen Chuei-Rong, Wu Chong-Feng. A theoretical study on the motivation of corporate hedging in the financial derivative market [J]. International Financial Studies,2001(08):66-71.







How to Cite

Zhao, Y., & Lu, J. (2024). The Application of Hedging in Enterprise Risk Management: The Case Study of Southwest Airlines. Journal of Innovation and Development, 7(2), 19-24.