Using an AIRLINE for T8

Yes @amal3008 - they are mainly about efficiency but aircraft utilisation is very important in the context of an airline for many reasons. Unlike other capital intensive industries, new capital outlay and investment in aircraft can have far reaching outcomes: newer more advanced aircraft offer better passenger experience in terms of better facilities on board, potentially improved safety, shorter flights as well as more efficiency (using significantly less fuel - the major direct cost). Therefore lower utilisation can impact on lots of financial ratios and also indicate that the company is not keeping up with the competition overall. Lower utilisation where there has been recent investment is a major cause of concern - and indicates that the airline needs to take corrective action as something is wrong in their 'product' e.g. poor customer service, bad punctuality, poor connectivity (time-tables and destinations) general bad publicity etc. ROCE could be used for profitability along with gross and operating profit.

@Duc Hung and @abdulbasit16 - please select the most appropriate forum topic - neither of these queries relates specifically to doing a RAP on an Airline So please use the search facility going forward to select the correct topic (see: Please help keep out forums tidy!!!!). No new information should be introduced in the Conclusion and therefore there is usually no need to include a reference. Some recommendations may need a reference if you are bringing in the suggestions and ideas of others. SLS Q1 normally uses more words than the others but do not waste words going on about what you and the mentor did and said. Reflection is about thinking about why you took a particular course of action and how this subsequently helped you achieve your objectives or contributed to your learning and development experience. Other questions do need to be adequately answered and fewer than 350 each would normally indicate they have not be covered in sufficient detail.

I haven't used SWOT in my RAP I used Porter's Five Forces and PESTEL analysis Do you think it will be fine by OBU? There is very less time so I can't change it also Just need assurance whether it would be fine or not

Delta airlines have made hedging loss due to the fall in oil prices.Does this affect their profits?Or will it just give rise to a liability?What is the double entry?URGENT help please.

Hi, To what extent can I use refer to the annual reports of the main company and the comparator while doing the financial analysis in case I am unable to find the relevant reasons from external sources. Secondly is it confirmed that this is the last submission period for which reports on airlines industry can be made and after this period there will be new industries/sectors to choose from? Thanks.

@arunk said: Hi, To what extent can I use refer to the annual reports of the main company and the comparator while doing the financial analysis in case I am unable to find the relevant reasons from external sources. Secondly is it confirmed that this is the last submission period for which reports on airlines industry can be made and after this period there will be new industries/sectors to choose from? Thanks.

There are no set limits on how much you can reference from annual reports. But it is stated that there should be balance between external and company's sources. So, it can be very subjective in nature. Best approach is that once you finish your first draft, give it to your mentor for review and he/she will read as an external reviewer, and then your mentor can comment whether your report is balanced or internal referencing outweighs external. Don't worry if you can't find FEW reasons from external sources you can use annual report - but don't make it consistent, few here and there will work. External referencing is real problem in ratios like liquidity. Yes, for period 35 and onward, new industries will be published. But, if you submit in period 34 and don't get successful, you can resubmit your project on same industry that you chose initially.

@syfar42 said: I haven't used SWOT in my RAP I used Porter's Five Forces and PESTEL analysis Do you think it will be fine by OBU? There is very less time so I can't change it also Just need assurance whether it would be fine or not

Yes, they are fine, it all depends on how you used the models. If you clearly and appropriately discussed your models then there is no need to worry.

@samin25 said: Delta airlines have made hedging loss due to the fall in oil prices.Does this affect their profits?Or will it just give rise to a liability?What is the double entry?URGENT help please.

In simple derivative terms, yes it will affect the profits, as they are accounted for fair value. Debit P&L Credit Derivative (Asset) I don't think you need to discuss Hedging Accounting here.

Thanks Ehsan. Btw I think you too are doing on Qantas and Virgin Australia which happen to be my main company and comparator respectively as well. Are you submitting or have you submitted in period 34 as well? Regards.

hi Moderator Thanks for the good work you doing on this forum, I only wish I came across this forum before making my last submission...which I failed because of evaluation. A quick question please... I am using British Airways and comparator is KLM, there is not much I can do to change it now, but they operate in different currencies...this wont be a problem would it? my marker didn't mention it has a problem in his feedback, but just wanted to be sure....

@arunk said: Thanks Ehsan. Btw I think you too are doing on Qantas and Virgin Australia which happen to be my main company and comparator respectively as well. Are you submitting or have you submitted in period 34 as well? Regards.

I was student of P33

@debade80 said: hi Moderator Thanks for the good work you doing on this forum, I only wish I came across this forum before making my last submission...which I failed because of evaluation. A quick question please... I am using British Airways and comparator is KLM, there is not much I can do to change it now, but they operate in different currencies...this wont be a problem would it? my marker didn't mention it has a problem in his feedback, but just wanted to be sure....

Certainly not! You would be using ratios, so currency differences doesn't matter.

I am almost done with the project on Delta airlines Do you know any reputable sites with which I can check for plagiarism before submission?

@syfar42 said: I am almost done with the project on Delta airlines Do you know any reputable sites with which I can check for plagiarism before submission?

WriteCheck

Does it make a difference if in my annexures I have slightly changed the layout of the results but keeping the underlying figures and bottomlines same of course e.g. in my balance sheet I have presented as follow: Non-current assets+Current Assets=Equity+Non-current Liabilities+Current Liabilities whereas in the financial statements presentation is as follows: (Current assets+Non-current assets)-(Current liabilities+Non-current liabilities) i.e. Net Assets=Equity. Thanks.

Hi, jut one query.How many words would you reccomend writing about the analysis of the business models swot and pestel?

@Jahnvi - you seem to have done a good lot of research, so well done for that. There would be no harm in setting out the basic CEO's strategies in your business analysis and you could refer to them (especially 1 & 2) when doing an assessment of the company performance. I tend to agree with you the legal cases are more indicative of their tarnished reputation (a weakness) than being part of the legal aspect of a PESTLE. In the PESTLE you are looking at general factors in the environment that might also affect other similar companies and not ones that are just specific to your company - so legal regulations and laws are part of the PESTLE not cases being brought against the company. As the 25% voting issue is being imposed by the government then, yes this is a political issue but it could also be a threat (as it comes from the external environment) to future expansion as it may deter foreign investment. Yes you can integrate the KPIs in with the financial analysis where relevant as they might help explain some of the revenue / profit / cost figures. Your ratios sound about right and it is how well they are explained that matters most. You could present some of the KPIs as charts and graphs if this is appropriate. Graphs can be created in the spreadsheet if you want or straight in the report. Sometimes it is easier to do them in the spreadsheet so that you experiment with formats and can then just copy them into your Presentation. As long as there are proper titles to the information in the appendices it is obvious that the information has come from the annual reports

@Arun - I don't suppose it really matters but I am not sure why you are changing the order as it can be confusing when things switch around within the same piece of work. However if you are being consistent within your report and the bottom lines are the same that is the main thing. [Traditionally assets (apart from for a bank where the reverse order was used) were always listed from most fixed to most liquid and liabilities were ordered current followed by non-current].

@Samin - there is no prescribed number of words. However I would suggest that you do a good application of the models first before the financial analysis and ensure that the factors from the models are linked with the financial performance.

Hi, i) My main company is Qantas and its comparator that I have chosen is Virgin Australia but there seems to be a disparity in the size and nature of both the companies in that Qantas operates on a more global scale. Therefore I am starting to rethink whether the two are comparable in the financial analysis. I noticed this when I was comparing the revenues of the two as Qantas' revenue ranges from 15,000-16,000 m whereas Virgin's ranges from 4,000-5,000 m. Should I just get along with the analysis. ii) Any tip on how to make the variations among the elements of the financial statements more noticeable in the graphs. As in the case of revenues I have made a column chart but the increasing trend is hardly noticeable. Thanks.

1) Qantas and Virgin Australia are best companies that you can compare. They are only and close rivals in Australian aviation, both are competing against each other strongly and both operates more or less in same segments. I did them and I passed so don't worry. Even though Qantas has more international presence, but when I did my research, more then 70% of its revenue was based from domestic operations and Virgin Australia, even though small comparatively, has transformed from LLC airline to full commercial airline at level of Qantas since 2000. Virgin Australia even started cargo services and loyalty program to face Qantas. Lastly, you will be comparing revenue growth rather than absolute figures so, large difference between revenues due to size difference won't matter. And matter of fact is that you can't find a company whose figures are very close to the main company. 2) You really can't do much here, can't simply increase the revenue!? If revenue has grown slightly in one year, you can talk less about that year. If the trend is same for all 3 years, then you can talk why the trend is increasing slightly and compare it with competitor.

In my Delta airlines company for Topic 8, is it a must to give recommendation and is a bibliography list also necessary? I gave conclusion and reference list tho'

Hi, Just to confirm, as long as I use external sources here and there in the financial analysis I can use the annual reports to reason out the variations, is that right? As I know a mentor who told us to use the annual reports for only figures and not for reasoning. Thanks.

@syfar42 - Conclusions and Reference list are mandatory, recommendations and bibliography are optional

@Jahnvi - if you feel more comfortable with net profit rather operating profit then go with it. Whatever you choose explain the underlying factors well.

@Chandan - 19 slides should be fine. Just choose the most important ratios for your graphs and do not have more than 2 per slide and don't use too much text -it should mainly be bullet points

@arun -do not make obvious statements however use the CEO and directors report to help with comments. Ensure you EXPLAIN and it does not read like the notes to the accounts e.g. the marker needs to know why net profit is higher or lower and will not be impressed if you tell them this relates to changes in depreciation/ admin/ marketing / staff costs etc - it is why these elements have changed you need to explain. Part 3 is therefore a balance of external sources and the annual report (mostly the written part of the report with just figures coming from the financial statements)

Thank you very much for the reply regarding the recommendation and bibliography requirement My mentor was saying that recommendation is also mandatory, whereas you are saying its optional, im getting a bit confused whether to do or not :(

You simply can't put no dividend at weakness. You need to analyse it and come up with well sourced reasoning. Maybe the shareholders don't mind if they are not getting dividends? They are more interested in re-investing? In my opinion, I will only put not paying dividends in weakness if it really harmed the relationship with shareholders, because POOR relationship with key stakeholders can be great weakness. Search the internet about the reaction of shareholders of company not paying dividends for few years.

@Jahnvi -weaknesses are harder to identify than strengths however you may be able to find some if you see what the comparator is doing really well or something that favours them. Where your main company in comparison is not performing so well or seems to be at a disadvantage it may be because they have a strategic weakness e.g. route network, older aircraft, already highly geared so not so attractive to investors.