FIN41960 Airline Operations

Academic Year 2021/2022

This module aims to give the student a good understanding of the airline industry, its evolution since the start of mass air travel, the trends and threats that today impact on an airline and its operations, and how they combine to make an airline one of the most complex and difficult businesses to manage. The module will also explain the various business models which are in use by airlines around the world, from Ultra Low Cost Carrier (so called ULCC’s) through Major Global Network Carriers (formerly Flag Carriers) and explain how the particular business of each airline has evolved such that most airlines are today a hybrid/amalgam incorporating many of the characteristics of the different business models as are appropriate to their own individual business operations.

The module will also explain the operations of an airline, from the revenue pipeline through flight production (Operations, Aircraft, Maintenance) and support activities such as HR (in a people intensive business), Finance (in a capital intensive business), and IT (managing a highly complex multi segmented customer specific operation).

The module will also examine the particular business models of IAG Group, Ryanair, ASL and other airlines located in Ireland and abroad to see how their particular business models have evolved, how their route networks and fleet plans have developed (and are developing), how they have managed through the major impact of the COVID-19 Global Pandemic and examine why and how they plan to succeed in this very competitive industry.

The module will also examine the capital structures used by the various airline business models, how airlines finance their business operations and aircraft in an industry which has both high operating and financial leverage. In these lectures we will look at the financial statements of several representative airlines, and examine the key aspects of their capital and operating structures which impact on the credit risks associated with financing an aircraft on lease to an airline, most of which are long term credit decisions.