Airline Finance.(book review)(Book review)

Airline Finance, 3rd Edition, by Peter S. Morrell. Ashgate Publishing Limited, Williston, Vermont. 2007. ISBN 978-0-75467000-1.

This book covers many aspects of airline finance; it gives a reasonable treatment of airline industry financial performance, and reviews different financial practices. In fewer than 260 pages, the book gives a concise presentation of many basic concepts in airline finance. The book includes thirteen chapters, which cover important topics from industry financial performance to airline bankruptcy. This text contains several excellent basic chapters covering financial ratios, airline valuation, sources of finance, and risk management.

The book is written to convey the most important concepts and principles of finance at a level that is approachable for general public and undergraduate finance students. Airline finance is an important discipline that should gain the interest of financial institutions and practitioners. It is closely related to corporate finance, describing the financial techniques available to all forms of air transport industry. The book is strong in providing real-world data that acts as archetype; however, a greater comparison of different airlines from a financial aspect could be intriguing. In essence, Airline Finance could become a much more powerful text if it were more practical rather than a general review of financial concepts used in the airline industry.

While Airline Finance is at times very detailed and addresses most of the major issues in airline finance, the major problem that limits the book is that it is non-technical in nature and does not provide the reader with an understanding of how to apply the topics. Moreover, very little of the book deals with decision making in the aviation industry, making the text impractical for students wishing to enter this field. For example, while the text does describe the various types of leases in the aviation industry, it does not discuss the decision to buy or lease--a critical decision in any business, especially in a highly capital-intensive industry such as the airline industry. Furthermore, practical concepts such as the time value of money, stock and bond valuation, and fuel hedging are either summarily discussed or relegated to appendices.

This book may function very well as a supplementary text for general corporate finance in aviation programs. In conclusion, the author offers a book that benefits students, general public, and practitioners.

Bijan Vasigh

Professor

Embry Riddle Aeronautical University

Daytona Beach, Florida 32114-3900

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