The twelfth five-year plan has listed the aircraft industry as one of the key emerging industries. Howev-er,the drastic fluctuations of aviation oil prices have posed huge risks to the development of aircraft industry and other related industries. This paper conducts an empirical study on the strategies of airlines’using Shanghai fuel futures to hedge against the fluctuations of jet fuel by using daily data of spot goods and futures from 2004 to 2012. It adopts ECM-GARCH model to calculate the best hedging ratio which is 39.72%. The paper also verifies that applying Shang-hai fuel futures for hedging is feasible and can help airlines avoid approximately 15%of the risk in jet fuel price fluctua-tion. It does help airlines maintain corporate profits to a certain degree,but the performance is slightly low. The analy-sis shows that due to the crisis,the performance of hedging is not only related with the hedging ratio,but also greatly affected by the fluctuations of exchange rate and the macro-economic situation. Finally,the paper puts forward strate-gic proposals and suggestions for the new-age state-owned and private airlines to do hedging.
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