ABSTRACT
This chapter addresses the growth of the industry by region along with the spread of privatization and provides several examples worldwide of the privatization phenomena. It also addresses the valuation of various parts of the aviation industry in a systematic financial manner. The chapter presents various factors that affect valuation in the aviation industry and provides a method for forecasting the future value of differing aviation entities. It discusses the new and unique methods that the industry has introduced to finance the significant capital requirements that are needed on an ongoing basis. A theoretical model or technique to approximate the value of the resources must therefore be a starting point for any market transfer of the resources from a government ownership to a private ownership. A number of methods are available to estimate the cost of equity. However, the capital asset pricing model is the most popular, due to its intuitive appeal and relative ease of application.
