Job Roles and Responsibility of a Finance Manager in an Airline Bhawana Aggarwal [MBA IIM-s] Manager FinTech AirCrews Aviation Pvt. Ltd.

Job Roles and Responsibility of a Finance Manager in an Airline

Bhawana Aggarwal  

As every business needs a financial management and financial manager, Airlines also need financial management and financial manager. Airlines financial management is a multifaceted challenging task. Most of the Airlines rely on MS- excel only but in today’s time many Airlines start using the Treasury Management system (TMS) for finance handling solutions.

Let’s try to understand the finance operations needed in the Airline:

Cost estimations:

All the Airline needs the following types of cost:

Startup cost:

Capital investment

Inventory cost

Operating cost:

Fuel cost

Labour cost

Employee cost

Depreciation cost:

Aircraft spares cost

Cash management:

Cash management means budgeting or cash forecasting. Forecasting can be for short term or long.

Following are some reasons for short term cash forecasting:

Determining operating cash requirements.

Anticipate short-term cash requirements.

Wise investment decisions for surplus cash.

Establish good relationships with bankers.

Long-term detailed cash forecasting is used to appraise proposed projects that require working capital and avail loans whenever required.

Following are some Airline's cash forecasting methods:

Causal Forecasting: It is derived from analyzing the statistical relationship between dependent variable against the independent variable. For example, analyzing trends.

Trend Forecasting: The changes of dependent variables are judged with respect to time. This helps in anticipating time-related changes.

Cyclical Variations: These are the changes in cash flow due to business cycles.

Seasonal Variations: These are the changes in cash flow due to a specific time period in the year.

Irregular Variations: These are the changes in cash flow due to erratic events such as strikes, wars, price wars, bankruptcies, or any other disturbance.

Revenue:

In this competitive world Airlines found many ways to earn revenue. They come up with many ideas which include understanding the needs of the consumers and competitor strategy, reducing the Airfare, and providing some loyalty points to loyal consumers. They also offer some ancillary products such as:

Airlines Taxes and Fees 

Add-on Services for Travel

On-board sales

Advertising sales

Airlines also prepare normal books of accounts like any other business:

Income Statement: Through income statement management comes to know that the Airline makes profit or loss.

Cash flow statement: through this management can get the whole idea of cash receipts and payments. And total cash generated or used under operating, investing and financing activities.

Stockholders equity: To maintain the record of stockholders equity.

Balance sheet: To get an idea of the financial position of an Airline at the point of time. It shows what the Airline owns as well as how much it owes.

Hence, all the above operations are done by a financial manager in the Airline. 


Bhawana Aggarwal [MBA IIM-s]

Manager FinTech

AirCrews Aviation Pvt. Ltd.

Bhawana@Air-Aviator.com

https://bhawanaaggarwal.vcardinfo.com







 

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