Matching Items (6)

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COMMERCIAL AIRLINE FUEL COSTS: HEDGING STRATEGIES AND PERFORMANCE

Description

This thesis examines the fuel hedging strategies and their performance in the airline industry. Hedging allows an airline to establish a semi-fixed cost for fuel prices in the future. Unexpected

This thesis examines the fuel hedging strategies and their performance in the airline industry. Hedging allows an airline to establish a semi-fixed cost for fuel prices in the future. Unexpected increases in fuel costs can easily move an airline into bankruptcy while a decrease in fuel prices can create massive profits. With fuel prices that can vary 70% in several months, many airlines hedge fuel costs in order to cap a massive expense for the company. It is extremely difficult for airlines, or anyone, to predict what fuel prices will do next week, yet alone next quarter. This thesis notes there is no advisable portion of fuel that should be hedged for any airline; it is instead a complex set of variables that must be analyzed for each individual firm on an ongoing basis. Hedging is notably advised if a firm can accept the added costs of hedging premiums, the wages of employees to actively manage a hedging portfolio and the additional accounting regulations that must be followed. It can be performed using a variety of hedging instruments and utilizing various commodities. Over time, hedging will have a net effect of zero, therefore adding zero value to the firm. In reality, it is assumed that hedging fuel costs will help stabilize fuel prices and therefore stabilize cash flows and profits. The ideal implication is that the market will respond to increased stability in profits with a higher value of the firms publicly traded stock.

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Created

Date Created
  • 2016-05

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The Airline Industry: How the Pandemic Has and Continues to Reshape the Industry as We Know It

Description

September 11th, 2001 was a day that affected everyone. The world came to a stop. The aviation industry was affected, and the national airspace system was closed for a few

September 11th, 2001 was a day that affected everyone. The world came to a stop. The aviation industry was affected, and the national airspace system was closed for a few days. The events that occurred on that specific day enacted changes that affect the industry to this day. This paper analyzes some of the changes that were made and discusses some of the changes the industry is going through again, about 20 years after the events on September 11th. The coronavirus pandemic has changed the way we all live our daily lives and aviation is not exempt. Changes to aircraft cleaning procedures, boarding processes, and seat design have all been ways the industry has gone through changes. The results of a potential recovery as well as the long-term changes are discussed.

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Agent

Created

Date Created
  • 2021-05

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Analysis of NRE Fees for American Airlines

Description

The project mainly involves creating a standardized tool to help American Airlines evaluate the cost of Non-Recurring Engineering fees (NRE fees) that arise as a result of maintenance and repairs

The project mainly involves creating a standardized tool to help American Airlines evaluate the cost of Non-Recurring Engineering fees (NRE fees) that arise as a result of maintenance and repairs on airplanes. Since there are few manufacturers licensed by the FAA to complete these modifications, let alone have the capabilities to complete them, American Airlines is often charged substantial fees to complete even minor work. The team will begin by conducting academic research looking into how parallel industries such as Automotive, Aerospace, High-Tech Manufacturing, etc. deal with heavily regulated modifications. We will then use this academic research to building a framework that American Airlines is able to use to estimate the fair cost of completing some of these modifications. The hope is that American Airlines can use this framework to determine whether they are being charged fair prices, and if they are not, to use the framework as leveraging tool in negotiations.

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Agent

Created

Date Created
  • 2016-12

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An airline pilot attitude evaluation: transportation security administration's federal flight deck officer program

Description

The Federal Flight Deck Officer (FFDO) program was mandated legislatively, as part of the Homeland Security Act of 2002. This study replicated earlier research that investigated pilots’ opinions of the

The Federal Flight Deck Officer (FFDO) program was mandated legislatively, as part of the Homeland Security Act of 2002. This study replicated earlier research that investigated pilots’ opinions of the current state of the FFDO program based on interviews. A Likert survey was created to allow simpler quantitative collection and analysis of opinions from large groups of pilots. A total of 43 airline pilots participated in this study. Responses to the Likert questions were compared with demographics, searching for significance through a Pearson chi-square test and frequencies were compared to earlier research findings. Significant chi-square results showed that those familiar with the program were more likely to agree the program should continue, it was effective, the screening and selection process of program applicants was adequate and the Federal Air Marshal Service’s management of the FFDO program was effective. Those with Military experience were more likely to disagree it was reasonable that FFDOs were required to pay for their own room and board during training or train on their own time. All those who shared an opinion agreed there should be a suggestion medium between FFDOs and their management. Unlike the prior study, all those familiar with the program agreed the weapons transportation and carriage procedures were adequate. Furthermore, all those who shared an opinion found the holster locking mechanism adequate, which was another reversal of opinion from the prior study. Similar to the prior study, pilots unanimously agree FFDOs were well trained and agreed that the program was effective and should continue.

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Agent

Created

Date Created
  • 2017

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Comparative qualitative research distinguishing safety features among aviation safety action programs in the United States airlines

Description

Over the years, aviation safety has been influenced by continuous implementations of both proactive and reactive policies by both regulatory boards and also, aviation service providers. This achievement has been

Over the years, aviation safety has been influenced by continuous implementations of both proactive and reactive policies by both regulatory boards and also, aviation service providers. This achievement has been possible mainly because of the safety management tools like the Aviation Safety Action Program (ASAP) which derives its roots from the much earlier Aviation Safety Reporting System (ASRS). Federal Aviation Administration (FAA) provides guidelines and procedures for installation and development of an ASAP, for every airline in the United States. In this study, how different United States air carriers apply ASAP in their organizations is investigated.

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Agent

Created

Date Created
  • 2016

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Passenger volumes post-accession to the European Union: signs of Southwest Airlines' model in Central and Eastern Europe

Description

In 2004 the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia joined the European Union (EU) as part of the EU's greatest enlargement to date. These countries were

In 2004 the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia joined the European Union (EU) as part of the EU's greatest enlargement to date. These countries were followed by Bulgaria and Romania in 2007. One benefit of joining the EU was the freedom for residents in the new EU member states to migrate to western European nations, notably the United Kingdom (UK). A result of this new freedom was an increased need for air travel. The intersection of the expansion of the EU with the introduction of low-cost airline service was the topic addressed in this study. Yearly traffic statistics obtained from the UK Civil Aviation Authority were used to formulate a trend line of passenger volume growth from 1990 to 2003. Through a time series regression analysis, a confidence interval was calculated that established that, beginning with the year 2004, passenger volumes exceeded the probable margin of error, despite flat population growth. Low-cost carriers responded to these market conditions through the introduction of new flights across the region. These carriers modeled themselves after Southwest Airlines, a strategy that appeared to be more effective at meeting the needs of the post-accession travel boom. The result was a dramatic rise in both passenger volumes and low-cost airline routes in an east-west direction across the continent.

Contributors

Agent

Created

Date Created
  • 2012