Volatility
In aviation, volatility refers to the unpredictable and sudden changes in the price of aviation fuel. The price of aviation fuel is subject to various factors such as global oil prices, geopolitical tensions, natural disasters, and supply and demand. Volatility in fuel prices can have a significant impact on airlines' profitability and operating costs. Airlines often use hedging strategies to mitigate the risk of volatility in fuel prices by locking in prices for a certain period of time. However, hedging strategies can also backfire if fuel prices drop below the locked-in price, resulting in losses for the airline.
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