Hedging strategies of China Eastern Airlines in 2022: navigating the dual shocks of COVID-19 and the Russia-Ukraine war

In this paper, the hedging strategy of China Eastern Airlines (CEA) in 2022, which is affected by the dual crises of COVID-19 pandemic and Russia-Ukraine war will be examined. Meanwhile, how these external shocks affect the effectiveness of the CEA's hedging will be described. Specifically, the results of the study show that the pandemic weakened the value of hedging. Global oil prices have been in position due to the decline in passenger demand. the CEA hedges lead to realized losses and deterioration of the firm's financial performance. In contrast, the Russia-Ukraine war triggered a significant increase in fuel prices. However, low hedging ratios and poor timing limited its effectiveness. Worse economic scenarios followed. Additionally, this article highlights the dual nature of hedging by analyzing the financial, managerial and policy dimensions. The research shows that it is not seen as an insurance policy only. Different scenarios of demand-side and supply-side shocks can also determine its value. The CEA experience consequently emphasizes the need for more flexible and adaptive risk management frameworks combined with operational strategies to better protect against risks with high future uncertainty. It also provides inspiration for global airlines and policymakers who are seeking to increase corporate resilience in an era of heightened volatility.