Fuel Hedging Effect on Airline Ticket Prices

Fuel hedging enables airline ticket prices to be at a sustainable level at which customers can afford even after an increase in the overall price of fuel, reducing the impact fuel prices have on airline ticket prices if any. The act of fuel hedging is beneficial especially in the long run if future prices of fuel are expected to increase. Moreover, the government may providesubsidiesto oil-producing companies or oil suppliers to reduce the overall costs of producing fuel. This will allow the prices of fuel to be maintained at a certain level, causing airline ticket prices to remain stable.

In addition, the subsidies may also be given directly to the airlines to maintain their prices at affordable rates even after the increase in fuel prices.

Are there any examples of these subsidies in real life? Provide examples of these subsidies.