Flying with(out) a safety net: Financial hedging in the airline industry

•We test hedging theories (fuel, FX & interest rates) to global panel of 100 airlines.•Fuel price hedging decreases EBIT margin volatility (mitigating financial risks).•Fuel hedging not impacting op. profitability & opcost (ineffective speculative tool).•Low current ratios increase profits; liquidity is key in capital intensive industries.