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Introduction. The airline industry is capital intensive and the accounting for aircraft assets has a significant impact on the financial results of airlines. Aircraft are high-cost, long-life assets and contain many individual components.
AIRCRAFT OPERATING COSTS. 4.1 INTRODUCTION. This section provides estimates of variable and fixed aircraft operating costs. Aircraft variable operating costs are important factors in the evaluation of FAA investment and regulatory programs that concern the time spent in air transportation.
The new lease accounting standard will fundamentally change the accounting for lease transactions and is likely to have significant business implications. Almost all leases will be recognised on the balance sheet, with a right of use asset and financial liability that recognise more expenses in profit or loss during the earlier life of a lease.
25 sty 2012 · Accounting standard changes • Derivatives accounting is starting to look more like economic reality. • KPMG investigates six of the accounting impacts of proposed changes to lease accounting, three of which would have significant balance sheet impacts for airlines. • Under the proposals, airlines will recognize operating lease
13 lip 2017 · A better approach. The only real way for airlines to learn how cost differentials add up is to build a bottom-up view of the unit costs, volumes, and productivity of their cost buckets. For example: What is the airline’s credit rating? Over how many years does it depreciate aircraft? What residual value does the airline assume for the aircraft?
IFRS 9 allows hedge accounting to be applied to highly probable cash flows if certain conditions are met. A common cash flow hedge in the airline industry is one where operating cash inflows in a foreign currency hedged using the foreign currency risk associated with a financial liability including aircraft financing or lease liabilities.
These benchmarks can be used for fleet planning decisions, budgeting purposes, setting targets for cost optimization programs. Look into each area of Airline’s operations from cost efficiency standpoint. Analyze, how your Airline benchmarks vs Industry in fuel efficiency, maintenance, staff productivity etc, and most importantly - why.
