Wall Street's next trading innovation: Airline fares derivatives

Airbus is working with Nasdaq to develop a derivatives-based trading platform that will allow airlines to protect against any drop in ticket prices.

to develop a derivatives-based trading platform that will allow airlines to protect against swings in ticket prices.

The London-based platform Skytra will enable airlines to manage its revenue risks for the first time by trading futures and options contracts based on its proprietary indices. The company said it has been developing benchmarks to track the daily changes in the price of air travel for two years. "Skytra has been created in collaboration with the air travel industry and players outside it to enable more financial predictability in a volatile market," Christian Scherer, Airbus' chief commercial officer, said in a statement.

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