Aviation Finance

Course Overview

This 1-day course provides the participants with a comprehensive overview of the finance related topics of the airline industry including financial performance, methodologies, structuring of deals and strategies.

Case studies & examples are included to enhance the learning curve and broaden the understanding of the concepts discussed. The course is suitable for bankers, lawyers, legal counsel and financial advisers.

Course Content

Airline Strategy

• Strategy for airlines
• Business model
• Why have the business models been changing- the model of the future

Operating Performance Drivers & Cost structures

• Overview of the airline specific KPI’s
• Demand:
  • Functions of demand
  • Consumer choice
  • Elasticity of demand
• Traffic
• Segmenting demand
• The drivers of traffic
• Airline cost classification
• Cost drivers

Fleet & Revenue Management

• Quantity based approach – capacity allocation
• Price-based approach
• Managing freight revenues
• Instability of airline tariffs
• Alternative pricing policies
• Structure of passenger fares
• Relating passenger tariffs to costs
• Airline passenger yields

Airline Financial Ratios

• Earnings ratios
• Efficiency ratios
• Asset ratios
• Risk or solvency ratios
• Liquidity ratios
• Du Pont model
• Inter-airline comparison of financial ratios
• Interpreting the results

Case Study

Airline Valuation

• The valuation approach
• Cost of capital
• The valuation principles specific to the airline industry
• Valuation of an airline

Case Study

Sources of Finance

• Internal finance versus external finance
• The players in aircraft finance
• Government and central bank involvement

Risk Management

• Foreign currency and exchange rate volatility
• Airline trading exposure to currency movements
• Airline foreign exchange risk management
• Fuel prices
• Fuel price exposure

Aircraft Leasing

• Finance lease
• Operating lease
• Japanese operating lease (JOL) and wet lease
• Sale and leaseback – good or bad?
• Lease versus buy decision

Delivering this course in-house for you to a number of participants could be very cost effective. Please call us on 020 7387 4484 to discuss this further.

If you have any questions about this seminar please write to us at post@redcliffetraining.co.uk.