Air Canada- Risk Management

1. Determining which external risks an organization can and should hedge.

2. Identify the most relevant sources of financial risks, and examine how these are being managed today. Include a description of risk, a sensitivity analysis, based on your forecast for the risks identified, and any other relevant information.

3. How are Air Canada's largest competitors managing financial risk? Do their risk management practices make a competitive advantage or disadvantage, based on your forecast?

4. Based on Air Canada's business environment, its current risk management program and the comparable analysis you have made, give a detailed recommendation to the board, including a proposed new risk management program.

(a) Give concrete examples of your recommendation.

(b) Explain the underlying risks of implementing your recommendation for the parties involved.

5. Identify a cross-asset hedging instrument (i.e., one that targets more than one type of risk) that would be appropriate for Air Canada to implement, given its business model.