The Cause of Financial Distress in Airlines Industry Introduction According to International Air

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The Cause of Financial Distress in Airlines Industry
Introduction
According to International Air Transport Association (IATA), global airline industry has a history of 100 years (2014). Today, there were more than 3 billion passengers and 50 million tonnes of cargo reach their destination through the wonder of flight every year, supporting over 57 million jobs and $2.2 trillion in economic activity (IATA, 2014). The airline industry plays a crucial role in economic because it helps in opening up new possibilities for tourism, business, and human connections, as well as affecting aircraft manufacturers. It is a large and growing industry which required a large capital. Infrastructure of aviation industry has been undergoes a drastic
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The Altman Z-Score model is being utilized for predicting the financial distress position in aviation industry firms. According to The Street (2011), applying the Altman Z-Score, puts American at the top of the list of potential industry bankruptcy candidates. In fact, according to the Altman Z-Score formula, despite all the improvements in the industry, each of the nine largest U.S. airlines remains a bankruptcy candidate (Bankruptcy scores: Ranking the airlines, 2011).
Present research paper is an attempt to study and analyze financial distress situation in 30 of the companies in this industry with specific reference to MAS, AirAsia, Air Canada, Australia Qantas Airline, Garuda Indonesia, Jet Airways, Korean Air, Singapore Airlines, Thai Airways, British Airways, Kingfisher Airlines, SpiceJet, American Airlines, Alaska Airlines, Continental Air Lines, Delta Air Lines, America West Airlines, Northwest Airlines, US Airways, Southwest Airlines, United Air Lines, Lao Central Airlines, Lion Mentari Airlines, Merpati Nusantara Airlines, Philippine Airlines, VietJet Air, Jetstar Pacific Airlines, Turkish Airlines, Vietnam Airlines, and China Airlines through Altman Z-Score.

Problem Statement
Does overcapacity cause jeopardy to airline companies? Overcapacity which refers to the capacity supply is more than the demand, the surplus of unwanted supply, indicate that the inefficiency of the firm in managing asset. Negative demand fluctuations in the airline industry, can be

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