Abstract
This paper presents the draft methodology to be applied for evaluating the financial health of airlines. In the introductory part, specific attributes, regarding the individual types of airlines, are described. Subsequent parts of the manuscript outline advantages and disadvantages to measure airlines performance when implementing financial indicators, as well as a general procedure to evaluate the financial situation of a company operating in the aviation industry. The most important part of the paper includes the proposal of the specific functional system to evaluate the economic performance of airlines. Financial evaluation itself (evaluation of financial indicators of the enterprise‘s economic performance) is performed through a particular case study when comparing several existing airlines.
Highlights
Airline companies face many different challenges, some of which may affect their performance and others that might result in their closure [1]
Worldwide public and private agencies take action to improve air transportation operations. Those changes seek to address challenges posed by increasing air traffic, increasing diversity of air traffic, aging infrastructure and ongoing efforts to make air transportation safer and more efficient [2]
Measuring airline performance using financial indicators helps the company to act in accordance with its financial capabilities and tackle the problems identified by means of such metrics
Summary
Airline companies face many different challenges, some of which may affect their performance and others that might result in their closure [1]. Mail, consignment – air carriers specializing in freight transport mostly operate long-distance flights. Measuring airline performance using financial indicators helps the company to act in accordance with its financial capabilities and tackle the problems identified by means of such metrics It can be the first indicators of defects and deficiencies in operation or other corporate functions. Systems of measuring company’s performance, based on exact financial indicators, retain the features of basic financial analysis indicators including the deficiencies [6] Their major drawbacks are their orientation to the past and past phenomena, their simplicity and the related inability of a complete description of a company in its complexity and their necessary interpretation, which is always dependent on the evaluator and is subjective [7]. The most important ones include easy data collection and their processing [8], as well as the possibility to compare the indicators of one or more companies over time, which reflects the fact that the structure of such indicators is based on accounting standards
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