Sources of airline and aircraft finance

Presentation Outline - Internal vs external sources of finance - Long versus short-term finance - Bonds, deentures and convertibles - The term loan - Manufacturers’ support - Export credits - Summary

The Good, the Bad and the Efficient : Productivity, efficiency and technical change in the Airline Industry, 2004:2008

This study models the joint production of desirable and undesirable output production (that is, CO2 emissions) of airlines. The Malmquist-Luenberger productivity index is employed to measure productivity growth when undesirable output production is regulated and unregulated. The results show that pollution abatement activities of airlines lowers productivity growth which suggests the traditional approach of measuring productivity growth, which ignores CO2 emissions, overstate "true" productivity growth.

The good, the bad, and the efficient: Productivity, efficiency, and technical change in the airline industry, 2004–11

This study models the joint production of desirable and undesirable output production (that is, CO2 emissions) of airlines. The Malmquist–Luenberger productivity index is employed to measure productivity growth when undesirable output production is incorporated into the production model. The results show that pollution abatement activities of airlines lowers productivity growth, which suggests that the traditional approach of measuring productivity growth, which ignores CO2 emissions, overstates ‘true’ productivity growth. The reliability of the results is also tested and verified using confidence intervals based on bootstrapping.

Housing supply in Australia : the impact of the availability of development finance

Before the Global Financial Crisis many providers of finance had growth mandates and actively pursued development finance deals as a way of gaining higher returns on funds with regular capital turnover and re-investment possible. This was able to be achieved through high gearing and low presales in a strong market. As asset prices fell, loan covenants breached and memories of the 1990’s returned, banks rapidly adjusted their risk appetite via retraction of gearing and expansion of presale requirements. Early signs of loosening in bank credit policy are emerging, however parties seeking development finance are faced with a severely reduced number of institutions from which to source funding. The few institutions that are lending are filtering out only the best credit risks by way of constrictive credit conditions including: low loan to value ratios, the corresponding requirement to contribute high levels of equity, lack of support in non-prime locations and the requirement for only borrowers with well established track records. In this risk averse and capital constrained environment, the ability of developers to proceed with real estate developments is still being constrained by their inability to obtain project finance. This paper will examine the pre and post GFC development finance environment. It will identify the key lending criteria relevant to real estate development finance and will detail the related changes to credit policies over this period. The associated impact to real estate development projects will be presented, highlighting the significant constraint to supply that the inability to obtain finance poses.

Attribute exclusion strategies in airline choice : accounting for exogenous information on decision maker processing strategies in models of discrete choice

We examine the impact of individual-specific information processing strategies (IPSs) on the inclusion/exclusion of attributes on the parameter estimates and behavioural outputs of models of discrete choice. Current practice assumes that individuals employ a homogenous IPS with regards to how they process attributes of stated choice (SC) experiments. We show how information collected exogenous of the SC experiment on whether respondents either ignored or considered each attribute may be used in the estimation process, and how such information provides outputs that are IPS segment specific. We contend that accounting the inclusion/exclusion of attributes will result in behaviourally richer population parameter estimates.

The Relative Efficiency of International, Domestic, and Budget Airlines : Nonparametric Evidence

This study determines whether the inclusion of low-cost airlines in a dataset of international and domestic airlines has an impact on the efficiency scores of so-called ‘prestigious’ purportedly ‘efficient’ airlines. This is because while many airline studies concern efficiency, none has truly included a combination of international, domestic and budget airlines. The present study employs the nonparametric technique of data envelopment analysis (DEA) to investigate the technical efficiency of 53 airlines in 2006. The findings reveal that the majority of budget airlines are efficient relative to their more prestigious counterparts. Moreover, most airlines identified as inefficient are so largely because of the overutilization of non-flight assets.

Corporate governance, accounting and finance: a review

We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The ‘stickiness’ of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.