ABSTRACT
The banking crisis was triggered by the collapse of a major United State investment bank Lehman Brothers in September 2008, although there were already signs of an impending crisis before then. International Civil Aviation Organisation report that the share of aircraft rentals in operating expenses has increased from 5.3 per cent in 1994 to 7.4 per cent in 2004, despite the interest rate element of the rentals down sharply over this period. Airline financial results are highly sensitive to small changes in either costs or revenues because of the historically high level of operational gearing that has prevailed. The airline industry appears to be a relatively labour intensive one in terms of the share of labour costs in total operating costs. Airlines such as Lufthansa have taken small stakes in airports, and the same airline has a sizeable flight catering and aircraft maintenance subsidiaries. The chapter also presents an overview of the key concepts discussed this book.
