Accounting project
Table of Contents
1. Introduction
1.1 Purpose
The main aim of this report is to analyse in-depth finance evaluation of 3 big airline companies in the world. The target company chosen for this analysis is Malaysia Airlines and the 2 comparable companies are Cathay Pacific and Lufthansa. This report examines each company’s financial performance and also provides recommendation for Malaysia Airlines in creating value for its shareholders.
1.2 Methodology
This report adopts an extensive review from Malaysia Airlines annual reports, Cathay Pacific annual reports, Lufthansa annual reports, financial statements of those companies and trade publications.
1.3 Scope
The companies discussed in this report are Malaysia Airlines, Cathay Pacific and Lufthansa.
1.4 Limitation
All information gathered for this report are secondary data, thus the accuracy is limited to the sources. Despite lack of primary data from market survey or interview, wide-ranging credible news article, and reports from consulting companies are incorporated.
2. Companies Profile
2.1 Target Company: Malaysia Airlines
Malaysia Airlines (MAS) is the government owned flag carrier of Malaysia. Based in Kuala Lumpur, Malaysia, the airline flies to over 60 destinations across the globe to Europe, North America, Middle East, South Asia, East Asia, Australia and New Zealand. Currently it operates over 100 aircrafts of Boeing and Airbus fleet. MAS subsidiaries include MASKargo, MASwings and Firefly. Skytrax, the world’s largest and most reliable airline survey, registers MAS as a five star airline together with Singapore Airlines, Qatar Airways, Asiana Airlines and Cathay Pacific (Skytrax, 2012a). MAS is listed on the stock exchange of Bursa Malaysia. Recently the airline is facing constant high losses due to poor management, stiff competition from budget carriers and rising fuel costs. In 2011, Malaysia Airlines recorded a stunning net loss of RM2.52 billion, which was the largest in its
1. Introduction
1.1 Purpose
The main aim of this report is to analyse in-depth finance evaluation of 3 big airline companies in the world. The target company chosen for this analysis is Malaysia Airlines and the 2 comparable companies are Cathay Pacific and Lufthansa. This report examines each company’s financial performance and also provides recommendation for Malaysia Airlines in creating value for its shareholders.
1.2 Methodology
This report adopts an extensive review from Malaysia Airlines annual reports, Cathay Pacific annual reports, Lufthansa annual reports, financial statements of those companies and trade publications.
1.3 Scope
The companies discussed in this report are Malaysia Airlines, Cathay Pacific and Lufthansa.
1.4 Limitation
All information gathered for this report are secondary data, thus the accuracy is limited to the sources. Despite lack of primary data from market survey or interview, wide-ranging credible news article, and reports from consulting companies are incorporated.
2. Companies Profile
2.1 Target Company: Malaysia Airlines
Malaysia Airlines (MAS) is the government owned flag carrier of Malaysia. Based in Kuala Lumpur, Malaysia, the airline flies to over 60 destinations across the globe to Europe, North America, Middle East, South Asia, East Asia, Australia and New Zealand. Currently it operates over 100 aircrafts of Boeing and Airbus fleet. MAS subsidiaries include MASKargo, MASwings and Firefly. Skytrax, the world’s largest and most reliable airline survey, registers MAS as a five star airline together with Singapore Airlines, Qatar Airways, Asiana Airlines and Cathay Pacific (Skytrax, 2012a). MAS is listed on the stock exchange of Bursa Malaysia. Recently the airline is facing constant high losses due to poor management, stiff competition from budget carriers and rising fuel costs. In 2011, Malaysia Airlines recorded a stunning net loss of RM2.52 billion, which was the largest in its
References: Arulampalam, J. (2011, March 11). MAS hedge down on unclear economy. Retrieved from The Star Online: http://biz.thestar.com.my/news/story.asp?file=/2011/3/11/business/8222990&sec=business BBC Cathay Pacific Airways Limited. (2008). Cathay Pacific Airways Limited Annual Report 2008. Retrieved from http://downloads.cathaypacific.com/cx/investor/annualreports/2008_interim-report_en.pdf Cathay Pacific Airways Limited Cathay Pacific Airways Limited. (2010). Cathay Pacific Airways Limited Annual Report 2010. Retrieved from http://downloads.cathaypacific.com/cx/investor/annualreports/2010_interim-report_en.pdf Cathay Pacific Airways Limited Deutsche Lufthansa AG. (2009). Lufthansa Annual Report 2009. Retrieved from http://investor-relations.lufthansa.com/fileadmin/downloads/en/financial-reports/annual-reports/LH-AR-2009-e.pdf Deutsche Lufthansa AG Deutsche Lufthansa AG. (2011). Lufthansa Annual Report 2011. Retrieved from http://investor-relations.lufthansa.com/fileadmin/downloads/en/financial-reports/annual-reports/LH-AR-2011-e.pdf Investopedia Lufthansa Technik. (2012). About us. Retrieved October 2, 2012, from http://www.lufthansa-technik.com/about-us;jsessionid=9DD2352A1CA3A76A806BC012BC1389A2.webbox2 Lufthansa Lufthansa. (2012b). Business segments: Catering. Retrieved October 3, 2012. from http://konzern.lufthansa.com/en/business-segments/catering.html Malaysian Airline System Berhad Malaysian Airline System Berhad. (2009). 2009 Annual Report. Retrieved from http://ir.chartnexus.com/mas/doc/ar/ar2009.pdf Malaysian Airline System Berhad Malaysian Airline System Berhad. (2011). 2011 Annual Report. Retrieved from http://ir.chartnexus.com/mas/doc/ar/ar2011.pdf Mills, J., Bible, L Ng, E. (2012, June 12). Malaysia Airlines raises funds with $785 mln bond. Retrieved from Bloomberg Businessweek: http://www.businessweek.com/ap/2012-06/D9VBI4A00.htm Ozyasar, H Sidhu, B. K. and Yee, L.H. (2012, May 24). MAS bonds secured. Retrieved from The Star Online: http://biz.thestar.com.my/news/story.asp?file=/2012/5/24/business/11348967&sec=business Skytrax Skytrax. (2012b). The World’s 4-star Airlines. Retrieved October 1, 2012, from http://www.airlinequality.com/StarRanking/4star.htm The Seattle Times Yahoo Finance. (2012). Malaysia Airlines says losses deepen in 4Q. Retrieved September 26, 2012, from http://finance.yahoo.com/news/malaysia-airlines-says-losses-deepen-110842605.html