In its first, Nasdaq has joined forces with Airbus to aid Skytra in terms of finance and risk management. Skytra is owned by Airbus, which is one of the most promising airline services in an industry that generates 1 Trillion USD in revenue each year. It marks the first time that the industry will witness financial risk management instruments playing a role in addressing revenue volatility.
It was Airbus who approached Nasdaq with the proposal, as revealed by Adena Friedman, President and CEO Nasdaq. Airbus has plausibly been impressed by the world-class infrastructure and market innovation that Nasdaq brings in the global market.
How will Nasdaq aid Skytra?
Nasdaq is set to bring in a suite of marketplace systems, besides market surveillance and risk management solutions. This is expected to aid Skytra in managing its assets, foresee risks and avert them accordingly, manage and build on finances by creating liquidity in certain parts of the business.
The current problem facing the airline industry
Short-term revenue visibility is the major problem facing the airline industry as of now. In this scenario, about 90% of tickets are being booked before 90 days from a flight’s take-off day. To add to that, the price of any flight ticket can vary by as much as 20% in any given month.
This makes it difficult for airline runners to plan their finances and allocate assets accordingly, which is of utmost importance for their growth.
The possible impact
In the last one year, Airbus’ share price has gone from 27 USD to 37.73 USD. Despite short-term revenue visibility, most airline companies have witnessed growth but Airbus’ performance in the market has gained the attention of investors. This steady growth, coupled with risk management and financial management programs that the company is going to undertake in its partnership with Nasdaq makes Airbus one of the companies that every investor has an interest in.