CONCLUSION: After considering all the policies and the methods adopted by the Air Canada Airline industry

we can say that all the policies adopted by it were appropriate. Because initially it had faced various external risks like a drastic downturn in the business after the terrorists attack of September 11 on the World Trade Center and the Pentagon which further lead to a MARKET RISK. It is so important to immediately mitigate this kind of risk as market risk in turn associated with so many risks like EQUITY RISK,LIQUIDITY RISK,CURRENCY RISK,COMMODITY RISK. In addition to this the business has also faced a financial crisis because of drastic increase in the fuel prices and health related and environmental security issues. The policies like CONSOLIDATION , GLOBAL EXPANSION & CODE SHARING ALLIANCES which were taken by the industry to overcome the above said risks have shown successful results which ultimately lead to gain a 0.2 percent net profit by the end of third qurter of 2010 which is a good indication regarding the positive impact of the procedures the industry adopted to mitigate the risk. In addition to this the emergence of AIR CANADA from Bankruptcy protection with the support of Deutsche bank gave a good financial support to the industry. The focus on the strategies like cost cutting, reducing capacity and managing the risk from pending labour contracts and the pension solvency deficit could be the best policies. Use of Derivative Financial Instruments is always the best risk management policy as it helps to overcome the liquidity and interest rate risks which in turn leads to insolvency risk. As Air Canadas interest expense was greater than its operating income keeping of its 60% long term debts at a fixed interest rate and the remaining 40 % at a floating rate can be the best advisable because floating interest rate always contrasts with a fixed interest rate, in which the interest rate of a debt obligation stays constant for the duration of the agreement. It also got the access to use SWAPS & INTEREST because of this floating rate debt which ultimately mimics the return from a fixed interest rate. It has also undertaken FORWARD CONTRACTS as it is the most basic interest rate management product and at the same time it will eliminate the foreign exchange rate risk which was also one of the significant issue faced by Air Canada in terms of Canadian Dollars instead of US Dollars . HEDGING of the fuel prices is the best risk management policy as fuel expense solely comprises 20 to 30 % of all expenses. Hedging using futures and options are very good short term risk minimizing strategy for long term traders and investors.

NEGATIVE SIDE OF THE RISK MANAGEMENT POLICIES: Aviation insurance despite of having the potential to mitigate low frequency and high severity events effect, it will give very huge losses from a single event. Hedging incase of foreign exchange rate risk was only possible up to 29 % and the remaining 71% needs needed a financial derivative. Integration or merging of the Air Canada & Canadian Airlines created a unique operational challenges incase of labour relations and two IT technology systems which inturn deteriorates the customer service.