Northwest Airlines selects SD-CM platform from SuperDerivatives

Airline Industry Information,  March 12, 2008  

Tags: Northwest Airlines Corp.

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AIRLINE INDUSTRY INFORMATION-(C)1997-2008 M2 COMMUNICATIONS LTD

The SD-CM commodity and energy derivatives platform from SuperDerivatives, a provider of multi-asset front-office systems, risk management, revaluation and online options trading solutions, has been selected by Northwest Airlines, an airline with around 1,400 daily departures, to hedge jet fuel costs.

The airline, which said rising fuel costs are one of the biggest challenges to the airline industry, said it sought a derivatives platform which would allow it to evaluate hedging strategies and option valuation for FASB 133 accounting. It confirmed the SD-CM platform supports its decision making process and enables it to plan and time its energy market purchases and financial activities.

According to SuperDerivatives, the web-based SD-CM combines real-time benchmark pricing with risk management, hedging, analytics, investment and marketing tools for options on energy products, agriculture commodities and base and precious metals. It said clients can make substantial savings from controlling energy costs.

The airline claimed the coverage offered by SD-CM gives it new hedging approaches using a choice of proxies to jet fuel exposure, including heating fuel and crude oil and the ability to use specialised instruments and crack options to its advantage.

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