In recent years the airline industry has experienced severe volatility in earnings, with airlines recording periods of substantial profits that are closely followed by periods of financial distress. This trend has continued into the new millennium, with numerous examples of airlines across the globe entering bankruptcy protection or liquidating.
The text provides an introduction to both the basics of finance and the particular intricacies of airline finance where there can be significant fluctuations in both revenues and costs. This new edition also includes:
- capital budgeting
- management of current assets
- financial risk analysis
- fuel hedging
- aircraft leasing
This textbook contains chapters that cover unique aspects of the aviation financial decision-making process. These include a rigorous and structured presentation of the buy versus lease decision that is prevalent in the industry, a valuation process for aviation assets, the recent trend toward privatization and the difficulty inherent in the valuation of a publicly-owned or semi-publicly owned asset.
The Foundations of Airline Finance, now in its second edition, is an introductory text that can be used either as a general financial text or in a specialized class that deals with aviation finance in particular.
Table of Contents
1. Airline Finance: An Overview 2. Airline Cost Classifications 3. The Time Value of Money and Its Setting in the Aviation Industry 4. Assessments of Risk and Return 5. Airline Financial Accounting Practices 6. Financial Performance and Measurement 7. Assessment of Financial Statements 8. Airline Capital Budgeting 9. Airline Capital Structure and Cost of Capital 10. Management of Current Asset 11. Revenue and Risk Management 12. Analysis of Aircraft Leases 13. Financial Trends in the Aviation Industry: Growth; Privatization; and Valuation
Dr Bijan Vasigh is Professor of Economics and Finance in the College of Business at Embry-Riddle Aeronautical University, Daytona Beach Florida, USA, and a Managing Director at Aviation Consulting Group, LLC.
Kenneth Fleming is Managing Director, ACG Aviation Consulting Group LLC, Ormond Beach, Florida, USA
Barry Humphreys is a former Director of Virgin Atlantic Airways; he is currently Non-Executive Chairman of the British Air Transport Association and an aviation consultant.
'This is an excellent worldwide aviation industry primer organized around finance and accounting principles. It is both an introductory text for airline finance students and a comprehensive repository of financial and economic data for all the world's airlines; as such, the book is very useful for industry and government planners and managers...Summing Up: Highly recommended. Upper-division undergraduates and above.' - D. Brand, formerly of Harvard University, in CHOICE
‘Airline Finance is a great "bridge" between theory and practice. The authors’ cumulative experience is reflected in a book that not only applies the tools of financial management to aviation, but explains why these analyses drive airline performance. The book provides solid frameworks to analyse critical decisions in airline finance, including fuel hedging, leasing, and valuation. Airline Finance should serve as the basic reference for airline CFOs, executives, and industry analysts.’ — John S. Strong, Professor of Economics and Finance, College of William and Mary, USA
‘The authors provide an excellent introductory text for airline finance students. Unlike other textbooks, there is a well-rounded coverage of invaluable finance and accounting concepts that provide students with the academic foundation to truly understand the aviation-related issues at hand’ — Dr. David Tan, University of New South Wales, Australia
‘Foundations of Airline Finance is an outstanding contribution to the field of aviation education. The authors provide an exceptionally in-depth look at airline finance at a level that is easy to comprehend.’ – Chaminda Prelis, Assistant Professor of Aviation Management, University of Dubuque, USA