ABSTRACT
Financing billions of dollars in flight and ground equipment in the new century presents a tremendous challenge to airline industry. The advent of deregulation changed the basic rules of the game for air carriers. Investments today are more often debt financed than equity financed. The balance sheet gives a picture of the financial position of a particular company or an entire industry at a certain date. Deregulation has provided firms with the ability to respond rapidly to changes in their costs and the fares offered by their competitors. Aircraft manufacturers tend not to favor financing aircraft as their main business is to make them. Comparison of cash flow to capital expenditures gauges a company's ability to finance capital programs with internally generated funds. The key to good airline cash management and financial planning is the cash forecast, or, more specifically, the cash budget. Nothing is permanent but change, and the value of cash forecasting depends on keeping abreast of change.
