Fuel is approaching 40 percent of total operating expenses for passenger airlines, surpassing the cost of labor as the number one expense for many companies. Faced with fuel price volatility, tightness in supply and increased complexity in forecasting demand, airlines are looking to capture savings and efficiencies in fuel procurement, price risk hedging and back-office fuel accounting.
OpenLink provides a complete solution for airline fuel management – from fuel planning and forecasting, procurement, contract management, logistics and inventory management to deal capture, risk management, hedging and compliance, right through to accounting and tax reporting. As a result, purchasing and finance teams get a complete view of company-wide inventory and forward commitments when they purchase and hedge.
With OpenLink you can automate straight-through processing of both physical fuel transactions and the financial derivatives used for hedging, giving you an aggregated physical-to-financial view of fuel positions and price risk exposure.
In fuel budgeting and planning, we provide the ability to analyze “what-if” scenarios such as forward price curves, changes in aircraft type and new routes or airports. In addition, you can report on forecasted versus actual fuel expenses and calculate your hedged fuel budget.
With OpenLink you get daily actual and estimated inventory valuations based on near real-time, automated updates. As a result, you have increased visibility across your supply chain with automated and accurate forecasts and scheduling. Finally, OpenLink analyzes the effectiveness of hedges and will cause the appropriate hedge accounting rules to be invoked and, critically, to be revoked if the hedge is later deemed ineffective – giving you the reassurance that earnings statements are being correctly reported.
OpenLink partners with IATA - will champion best practices for airlines on risk, hedging, procurement and treasury.