Global airlines will need long-term productivity gains

2016 ◽  
Keyword(s):  
Mergers And Acquisitions ◽  
Airline Industry ◽  
Cost Of Capital ◽  
Low Cost ◽  
Air Transport ◽  
Economic Sustainability ◽  
Content Type ◽  
The Cost ◽  
Productivity Gains

Subject Airline industry outlook. Significance The International Air Transport Association (IATA) predicts that the global airline industry will record a fifth year of profitable operations in 2016. The average profit margin is foreseen at 5.6%, with the industry meeting the cost of capital for the second consecutive year. This is the first period of economic sustainability in the airline industry's history. Impacts Further consolidation is likely among North American airlines, but smaller carriers are reluctant to embark on major restructuring. In Asia, the appetite for looser alliances and joint ventures will prevail over mergers and acquisitions. Low-cost carriers offering cheap business class services, in addition to less expensive economy-class tickets, will pressure IATA members.

Better risk pricing can unlock billions in investment

2018 ◽  
Keyword(s):  
Direct Investment ◽  
Cost Of Capital ◽  
Political Risk ◽  
Investment Decisions ◽  
Content Type ◽  
Cross Border ◽  
Percentage Points ◽  
Risk Pricing ◽  
The Cost

Subject Pricing political risk. Significance The mis-measurement of political risk is resulting in the cost of capital being valued 2-4 percentage points higher than it should be in assessments ahead of cross-border investment decisions. Research suggests that in 2016 this could have increased net foreign direct investment (FDI) to non-advanced countries by more than 10%. Impacts Political risk measurement is set for a renaissance, with interest from practitioners and end-users likely to proliferate. Frontier markets that are on the edge of inclusion in 'emerging' portfolio allocations could see an uptick in investment inflows. Returns to long-term capital managers, from insurers to pension funds, will rise as cost-of-capital calculations grow in sophistication.

The effects of audit quality on the costs of capital of firms in Ghana

2018 ◽  
Vol 16 (4) ◽  
pp. 639-659 ◽  
Author(s):  
William Coffie ◽  
Ibrahim Bedi ◽  
Mohammed Amidu
Keyword(s):  
Audit Quality ◽  
Cost Of Capital ◽  
Stock Exchange ◽  
Low Cost ◽  
Cost Of Debt ◽  
Future Research ◽  
Content Type ◽  
Listed Firms ◽  
Financial Firms ◽  
The Cost

PurposeThis paper aims to investigate the effects of audit quality on the cost of capital in Ghana.Design/methodology/approachNon-financial firms listed on the Ghana Stock Exchange (GSE) as well as non-listed firms from the database of Ghana Club 100 were included in the sample. Series are yearly, covering a sample of 40 firms during the six-year period, 2008-2013. The study employed the positivist research paradigm to establish the relationship between audit quality and the cost of capital.FindingsThere is evidence to suggest that the cost of debt and the overall cost of capital of firms in Ghana can be explained by the quality of the external auditors. The results also show that the large size of the board is associated with low cost of debt.Research limitations/implicationsThe fact that the choice of quality measure is based on firm size only and other measurements of audit quality could not be measured. Future research may examine how other approaches to measuring audit quality affect cost of capital.Practical implicationsThe results significant for those charged with assurance and regulation, as well as lenders and managers of companies.Originality/valueThe authors investigate how external auditing quality affects the cost of capital of firms operating in Ghana.

The US rebound will be less even than headlines imply

2021 ◽  
Keyword(s):  
Mergers And Acquisitions ◽  
Cost Of Capital ◽  
Diagnostic Equipment ◽  
Expected Return ◽  
Content Type ◽  
The Us ◽  
Main Driver ◽  
Service Sectors ◽  
The Cost ◽  
International Airline

Significance Hiring was strong in the leisure and hospitality industries, anticipating higher consumer spending, the US economy's main driver. Accelerating progress on vaccination points to a faster-than-expected return to regular business activity while President Joe Biden's USD1.9tn relief package and proposed USD2.25tn first-phase infrastructure package announced yesterday promise additional stimulus. Impacts Service sectors whose tasks can be automated will see more mergers and acquisitions to lower the cost of capital for further automation. Automation will impose fierce downward cost pressure, driving companies that cannot adapt out of business in many sectors. International airline and hotel groups will seek to acquire regional carriers and smaller hotels serving domestic leisure travellers. Telemedicine will expand markets for at-home diagnostic equipment and health and fitness devices and apps.

The financial consequences of human capital disclosure as part of integrated reporting

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Antonio Salvi ◽  
Nicola Raimo ◽  
Felice Petruzzella ◽  
Filippo Vitolla
Keyword(s):  
Human Capital ◽  
Firm Value ◽  
Fixed Effects ◽  
Cost Of Capital ◽  
Positive Impact ◽  
Firm Risk ◽  
Integrated Reporting ◽  
Content Type ◽  
Financial Consequences ◽  
The Cost

PurposeThe purpose of this paper is to analyse the financial consequences of the level of human capital (HC) information disclosed by firms through integrated reports. Specifically, this work examines the effect of HC information on the cost of capital and firm value.Design/methodology/approachA manual content analysis is used to measure the level of HC information contained in integrated reports. A fixed-effects regression model is used to analyse 375 observations (a balanced panel of 125 firms for the period 2017–2019) and test the financial consequences of HC disclosure.FindingsThe empirical outcomes indicate that HC disclosure has a significant and negative effect on the cost of capital and a positive impact on firm value. Our results show that companies can reduce investors' perceived firm risk by improving HC disclosure, leading to a lower cost of capital. Moreover, our findings support the notion that increased levels of HC disclosure are linked to firms' improved access to external financial resources, consequently enhancing firm value.Originality/valueThis study is the first contribution to examine the financial consequences of HC disclosure and is one of the first to examine the level of HC information within integrated reports.

Positive behavioural support for children and adolescents with learning disabilities and behaviour that challenges: an initial exploration of service use and costs

2016 ◽  
Vol 21 (4) ◽  
pp. 169-180 ◽  
Author(s):  
Valentina Iemmi ◽  
Martin Knapp ◽  
Caroline Reid ◽  
Catherine Sholl ◽  
Monique Ferdinand ◽  
...  
Keyword(s):  
Learning Disabilities ◽  
Children And Adolescents ◽  
Service Use ◽  
Potential Cost ◽  
Content Type ◽  
Total Cost ◽  
Behavioural Support ◽  
Delphi Exercise ◽  
The Cost

Purpose Positive behavioural support has been considered as a valuable alternative to residential care for children and adolescents with learning disabilities and behaviour that challenges. While recent evidence suggests it has a positive impact on behaviour and carer ability to cope, there is little evidence of its economic costs or benefits. The paper aims to discuss this issue. Design/methodology/approach An exploratory cross-sectional study was conducted to evaluate the cost of providing positive behavioural support to ten children and adolescents with learning disabilities and behaviour that challenges living in the community in Ealing, West London. Comparison was also made with the cost estimate of possible alternative support packages for children and adolescents with learning disabilities and behaviour that challenges in the UK, as obtained through a Delphi exercise. Findings Total cost of services per child was £1,454 per week for young people supported short-term, and £1,402 supported long-term. Children and adolescents were making use of a range of social care, education and health services. Over the full sample, half of the total cost was accounted for by education services. The Delphi exercise estimated the weekly cost of residential-based care as more expensive than the cost of community-based care for children and adolescents with learning disabilities and behaviour that challenges. At the end of the ITSBS, all ten children and adolescents initially at risk of imminent residential placement were living in the community with less service-intensive and less expensive support. This suggests that avoiding residential-based care could reduce costs in the long term. Originality/value Positive behavioural support has potential to support people with learning disabilities and behaviour that challenges in the community, leading to potential cost advantages. However, this is a small study and more robust research is needed.

Ryanair: success before love

2015 ◽  
Vol 31 (8) ◽  
pp. 1-3 ◽  
Author(s):  
Mark Thomas
Keyword(s):  
Airline Industry ◽  
Business Models ◽  
Low Cost ◽  
Public Image ◽  
Necessary Condition ◽  
Sustainable Competitive Advantage ◽  
Value Proposition ◽  
Content Type ◽  
The Public ◽  
True Value

Purpose – This paper aims to show why public acclaim is not always a guarantee for healthy profits. A low-cost forerunner, Laker Airlines, also discovered this same fact to its fatal cost. A company needs to understand its true value proposition and ensure that customers are willing to pay for it. Ryanair was adored by the public when it began its low-cost flights from Dublin to London in 1986. That love nearly drove it to bankruptcy. Today, despite its poor image, it is one of the most successful and profitable companies in the industry. Design/methodology/approach – The article analysis of the changing fortunes of Ryanair from its launch to its near bankruptcy in 1991 and then its revival of fortunes. It draws a parallel with Laker Airlines and the low-cost transatlantic Skytrain. Adulated by the public, the company folded in 1982. It is supplemented with research the airline industry and low-cost business models. Findings – The article shows why companies should not fall into the trap of believing that a good public image will be the necessary condition for maintaining a sustainable competitive advantage. They need to fully understand the value proposition and what a customer is willing to buy.

scholarly journals Cultivate, assess, advocate, implement, and sustain

2017 ◽  
Vol 33 (2) ◽  
pp. 100-116 ◽  
Author(s):  
Sara Mannheimer ◽  
Conor Cote
Keyword(s):  
Cost Savings ◽  
Digital Preservation ◽  
Shared Vision ◽  
Limited Resources ◽  
Shared Knowledge ◽  
Collective Knowledge ◽  
Content Type ◽  
The Cost ◽  
Ongoing Support

Purpose For libraries with limited resources, digital preservation can seem like a daunting responsibility. Forming partnerships can help build collective knowledge and maximize combined resources to achieve digital preservation goals. This paper aims to provide guidance to help libraries with limited resources achieve digital preservation goals by forming partnerships to build collective knowledge and maximize combined resources. Design/methodology/approach In 2015, librarians from four Montana institutions formed the Digital Preservation Working Group (DPWG), a collaboration to increase digital preservation efforts statewide. The group’s immediate goals were to promote digital preservation best-practices at each individual institution, and to learn about and support each other’s work. The group’s long-term goal was to implement a shared digital preservation service that would fill gaps in existing digital preservation efforts. Findings Beyond the cost savings gained by sharing a digital preservation service, the members of DPWG benefitted from shared knowledge and expertise gained during the partnership. The group also functioned as a sounding board as each institution built its digital preservation program, and it became a system of support when challenges arose. Practical/implications This paper proposes a five-point plan for creating digital preservation partnerships: cultivate a foundation of knowledge and identify a shared vision; assess the current digital preservation landscape at each institution; advocate for the value of digital preservation activities; implement shared digital preservation services; and sustain group activities and establish structures for ongoing support. Originality/value The activities of DPWG provide a model for institutions seeking to collaborate to meet digital preservation challenges. This paper shows that by implementing a structured plan, institutions can build and sustain digital preservation partnerships, thus positioning themselves to achieve digital preservation success.

scholarly journals Low-cost air traffic as a determinant of tourism development

2021 ◽  
Vol 10 (19) ◽  
pp. 43-57
Author(s):  
Filip Bugarčić ◽  
Marijana Bugarčić
Keyword(s):  
Information Technologies ◽  
Low Cost ◽  
Air Traffic ◽  
Air Transport ◽  
Passenger Transport ◽  
Economic Activities ◽  
Doing Business ◽  
Global Trend ◽  
The Cost ◽  
Further Development

Air transport as an organized form of service provision, especially in passenger transport, can be important for increasing the number of foreign tourists. Globalization and the development of information technologies have contributed to the development of the business model of airlines, which has enabled a significant reduction in the cost of air travel and the accelerated development of this industry. Therefore, the emphasis is placed on the global trend of development of low-cost airlines, their way of doing business and the effects they have on the development of tourism. The increase in the number of low-budget airlines has multiple effects on the development of international tourism and passenger transport due to cheaper transport, which is made possible by improving the competitiveness of air transport after its deregulation. In addition, lower prices and a better logistical position can contribute to an increase in the number of foreign tourists and a higher income for this industry, as well as other related economic activities. The aim of this paper is to examine through theoretical and empirical insight whether there is an impact of low-cost airlines on the volume of air traffic and the intensity of passenger transport, with an emphasis on existing literature, as well as empirical confirmation on the example of Serbia. The conducted research has important implications, since in pandemic conditions, further development of low-budget airlines is expected to contribute to the recovery of air traffic and tourism.

scholarly journals A climate investment trap in developing economies

2021 ◽  
Author(s):  
Nadia Ameli ◽  
Olivier Dessens ◽  
Matthew Winning ◽  
Jennifer Cronin ◽  
Hugues Chenet ◽  
...  
Keyword(s):  
Cost Of Capital ◽  
Developing Economies ◽  
Low Cost ◽  
Energy Transition ◽  
Green Energy ◽  
Electricity Production ◽  
Green Electricity ◽  
Net Zero ◽  
Sustainable Finance ◽  
The Cost

Abstract Finance is vital for the green energy transition, but the access to low cost finance is uneven as the cost of capital differs substantially between regions. This study shows how modelled decarbonisation pathways of developing economies are disproportionately impacted by assumptions around their cost of capital (WACC). For example, representing regionally specific WACC values indicates 35% lower green electricity production in Africa for a cost-optimal 2°C pathway. Moreover, results show that early convergence of WACC values for green and brown technologies in 2050 would allow Africa to reach net-zero emissions approximately 10 years earlier than when convergence is not considered. A “climate investment trap” arises for developing economies when climate-related investments remain chronically insufficient. Elements of sustainable finance frameworks currently present barriers to these finance flows and radical changes are needed so that capital is better allocated to the regions that most need it.

Large US household balance sheets pose macro risks

2021 ◽  
Keyword(s):  
Interest Rates ◽  
Health Costs ◽  
Gdp Growth ◽  
Lower Growth ◽  
Content Type ◽  
Balance Sheets ◽  
Trade Growth ◽  
Productivity Gains ◽  
Macroeconomic Risks

Significance An examination of the factors behind the expansion indicates that outsized balance sheets will persist and will pose a number of macroeconomic risks. Impacts Slower workforce growth will pressure GDP growth, trade growth and long-term interest rates, unless productivity gains can offset this. A record number of US business deaths and births in 2020 will affect productivity and have unpredictable impacts on the economy. Lower growth makes it harder to stabilise debt-to-GDP ratios, just as pension and health costs rise as populations age in major economies.

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