Financial analysis and management - Assignment Example

It has been observed that profitability ratios have been fluctuating for the airlines in recent years with major setback in the fiscal year 2011-12. However, both the airlines have experienced increase in their liquidity ratios in the fiscal year 2012-13 with Emirates showing higher rate of increase indicating that the companies are in a good financial position to pay off their short term and long term loans and obligations. From investment ratios it has been observed that British Airlines is in a better equity position than the Emirates.

This means British Airlines is more efficient in utilizing shareholders’ equity for garnering profit making it more lucrative company for prospective shareholders. Aviation industry is concerned with manufacturing and flying of commercial aircrafts. This industry provides the most rapid transportation network connecting every country in this world. The contribution of aviation industry on international business and tourism is immense. Aviation industry provides employment opportunities on the line of many activities including aircraft maintenance and ground-based infrastructure.

The industry plays a very prominent role in a country’s economic structure. As economic development has increased air transport demand across the world, the industry itself is considered as a catalyst of economic growth. Providing a network of transport between all countries, the aviation industry allows easy access to the global market thus enhancing productivity leading to growth of economy. Increased air travel between two countries can have a great positive impact on the GDP of both countries.

For instance, growth in air service between Poland and UK since 2003 has paved the way for long term GDP growth in Poland by US$634 million every year while UK has been benefited with annual GDP growth by US$45 million. Also, since increased connectivity