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What is meant by financial flexibility? (airline industry)

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I recently read in a financial magazine an article that indicated that the airline industry has poor financial flexibility.

What is meant by financial flexibility?
Why financial flexibility is important for the airline industry?
How can the airline industry as a whole to improve their financial flexibility?
What would be the simplest way to improve financial flexibility and would have the biggest impact?

What is the importance of financial flexibility in other industries?

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Suggestions and comments:
What is meant by financial flexibility?
Financial flexibility is usually about the ability to change costs or pricing or production in response to activity. For instance, if production increase, can you add workers? Or, if production drops can you reduce workers? In other words, can you change the financial commitments?

Why financial flexibility is important for the airline industry?
The airline industry has high fixed costs. They have to lock in long term costs (airplane investment) in response to potential customer demand in the future. But demand is fleeting and hard to predict. For instance, after 9/11, ...

Solution Summary

Comments are 441 words and explains clearly at a novice level, explaining the concept of financial flexibility, as it relates to the airline industry.

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