ABSTRACT
In this chapter, the sources of finance will be evaluated from both the demand or airline needs and the perspective of the suppliers of finance. A large number of options or financial instruments have been developed by the banking and finance community, some of them complex. Here, the focus will be on how airlines finance their assets and operations. One huge advantage that airlines have over other industries is that most of their finance is related to aircraft and its associated equipment. This in turn means moveable assets and useful collateral.
The three main aims for airline finance were recently described as 1 :
Minimise the cost of capital
Maintain an investment-grade balance sheet
Ensure diversity of funding
