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Capital structure of airlines

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Author(s): Márcio Pereira Sousa | Heloisa Márcia Pires

Journal: Journal of Transport Literature
ISSN 2238-1031

Volume: 5;
Issue: 4;
Start page: 240;
Date: 2011;
Original page

Keywords: capital structure | cash flow | earning | equity

ABSTRACT
The study examines financially 24 civil aviation companies, all of them are public companies with shares traded on the New York Stock Exchange, of which three are European, 4 are located in Latin American countries, two Asian and other based in United States, with total annual revenues around 200 billion dollars. The analysis, covering five years of financial publications from airlines, approach capital structure variables such as operating cash flow, cash flow to shareholders, leverage and profitability ratios. We have observed that there were ten occurrences of unfunded liabilities in the annual publications analyzed. Two companies had just third parties capital since 2004 until 2006 and four airlines had no equity shareholder in the balance sheet. Among the evidences founded one stands in relation to operating margin, which suggests there aren’t economies of scale, with consequent reduction of costs and operating expenses, for companies that get more revenue, because it is precisely among those companies that found the highest incidence negative operating margins.
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