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Pricing Fuel Risk: Oil Price Exposure, Fuel Hedging and the Stock Returns of Ryanair, Delta Air Lines and Lufthansa

Author

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  • Peter Moschos

    (Mohawk College)

Abstract

This study examines the relationship between crude oil price fluctuations and equity returns of three international airlines, Ryanair Holdings, Delta Air Lines, and Deutsche Lufthansa, representing different business models and fuel hedging strategies. Using daily financial data, the analysis investigates airline stock return sensitivity to West Texas Intermediate (WTI) and Brent crude oil futures prices, with the S&P 500 serving as the market benchmark. The methodology combines correlation analysis, multiple regression, scenario-based sensitivity analysis, market beta estimation, and single-factor elasticity regressions. The findings reveal considerable differences in oil price exposure across airlines. Ryanair exhibits the strongest negative relationship, with estimated elasticities of −0.12 for WTI and −0.13 for Brent (p

Suggested Citation

  • Peter Moschos, 2026. "Pricing Fuel Risk: Oil Price Exposure, Fuel Hedging and the Stock Returns of Ryanair, Delta Air Lines and Lufthansa," Littera Scripta, VSTE, vol. 19(2), pages 1-1–21, December.
    • Handle: RePEc:rsg:littra:2026-009
    DOI: 10.36708/LS.2026.I02.001
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    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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