Airbus Selects Nasdaq Technology For New Derivatives Venue

  • Newly established Skytra Ltd. is developing a new trading venue in the UK to enable the $1 trillion global air travel industry to hedge revenue risk
  • Nasdaq’s marketplace platform will deliver full trading venue functionality including: matching, surveillance, risk management and MiFID II regulatory reporting to power the derivatives trading venue

Airbus’ wholly owned subsidiary Skytra has selected Nasdaq, architect and provider of the world’s most widely adopted financial market infrastructure technology, to provide the core technology for its derivatives trading venue.

Headquartered in London, Skytra was recently established to help the $1 trillion per annum air travel industry hedge its revenue risk through the trading of cash-settled futures and options contracts based on a series of Skytra Price Indices. This is the first time that the industry will have financial risk management instruments available to them specifically to address revenue volatility.

The air travel industry makes long-term financial commitments, but is challenged by short-term revenue visibility, where up to 90% of the tickets are booked within 90 days before take-off. Skytra’s index futures and options will improve airlines’ ability to manage their revenue risk in order to support their long-term financial planning. The Skytra indices have been developed over a period of two years in close collaboration with the air travel industry.

As part of the agreement, Nasdaq will deliver a full suite of marketplace systems, including the core matching engine, the regulatory reporting required under MiFID II, and the market surveillance and pre-trade risk management solutions required to safeguard the integrity of the trading venue. The systems will be hosted in Nasdaq’s data centres and the public cloud. Nasdaq will provide a fully managed service, including technical operations of all software and infrastructure.

Adena Friedman, President and CEO, Nasdaq said: “The creation of Skytra by Airbus represents a dynamically new intersection between aviation and financial marketplaces, where the benefits will extend to companies in both ecosystems and the broader markets economy. By integrating our market technology, Skytra will have the scalability and flexibility to continuously improve the trading experience to the benefit of both the global airline industry and financial market participants.”

Mark Howarth, CEO, Skytra said: “We chose to work with Nasdaq because of its impressive track record in delivering best-in-class infrastructure, technology, and innovation for markets across the globe. Its modular architecture means we will be positioned for growth as the Skytra platform builds traction with the airline industry and as we cater to the wider needs of other market participants.”

Christian Scherer, Chief Commercial Officer, Airbus said: “Skytra has been created in collaboration with the air travel industry and players outside it to enable more financial predictability in a volatile market. We are delighted that Nasdaq, a leader in financial market infrastructure, will be providing the core technology needed to deliver the solution the air travel industry needs.”

Skytra is in the process of applying to the UK’s Financial Conduct Authority for approval to operate a Multilateral Trading Facility (MTF) and to be registered as a Benchmark Administrator.

Nasdaq’s market technology powers more than 250 of the world’s market infrastructure organizations and market participants, including broker-dealers, exchanges, clearinghouses, central securities depositories and regulators, in over 50 countries with end-to-end, mission-critical technology solutions.

Source: Nasdaq

Related articles

  1. The first amendments to the CFTC's swap data reporting rules come into effect on December 5.

  2. CEDX is planning to expand its range of products in 2023, subject to regulatory approvals.

  3. The paper proposes a path forward for standard SLD documentation.

  4. Exchange group’s crypto suite has had consistent volume and open interest growth.

  5. The derivatives venue owned by FTX wanted to offer products that were not fully collateralized.