ABSTRACT
This chapter provides an understanding of airline financial statements. The statements that are covered are the profit and loss or income statement, the balance sheet, and the cash flow statement. The financial statements of the AMR Corporation, which consists largely of the US major, American Airlines and its commuter airline subsidiaries, will also be presented and contrasted with British Airways (BA). The directors of an airline will contract with a firm of auditors to examine the books and annual financial statements of the company on behalf of the shareholders. BA only reports the Group profit and loss account, which includes the parent company and any subsidiary controlled by the parent. The Profit and Loss Account or Income Statement can be divided into: trading or operating account, profit and loss account or income statement and appropriation account or statement of earned surplus.
