Critically analyse and discuss IAG's hedging strategy and outcome of the precious hedging decision in reards to the pandemic: IAG manages fuel price risk with derivatives. This lets the airline lockdown fuel prices, a major variable cost. As of September 2020, fuel hedging cost the company \$1.9 billion. Money was lost due to pandemic travel demand and oil price volatility. Oil prices didn't rise as expected, costing IAG money on its expensive swap contracts. 2021 saw IAG hedge jet fuel needs more conservatively. The new policy reduced hedging. Each airline in the group could tailor its hedging activities to their operational needs. IAG hedged more call options. These options let you buy fuel at a predetermined price without obligation, unlike traditional hedging. The two-year rolling hedging allowed 60% of expected jet fuel buying in the first year and 30% in the second. Vueling, owned by IAG, could hedge 75% in the first year. Only in "exceptional circumstances" could fuel be hedged 25-36 months ahead. In Q1 2022, IAG hedged 70\% of its fuel needs at set prices and 60% for the year. They managed fuel price risks from currency exchange rates with this strategy. IAG expected to offset a 45% fuel price increase with $1.2 billion from its hedging programme. Depending on market conditions, hedging can make or lose money