Capital Financing

Capital Financing
Name
Institution
Capital Financing
Discuss the problem of airline capital financing. What are the major sources of funding? How did the jet age effect those funds?
In the 2008 financial crisis, the airline industry was greatly affected. Banks, which were and still are airlines largest financiers, decided to cut or reduce the loans they were offering airlines. At the time, almost all industries were struggling and therefore, banks were also trying to cut their losses and secure themselves in case the airline industry crumbles. Another reason why banks did what they did was that the airline industry is capital intensive. This means that it requires a lot of money to run which the banks were keen on withholding because the future was unknown at the time (PWC, 2013).
There are different sources of funding for an airline industry. The industry might be capital intensive but the sources of funding are quite many. They include bank loans or finance leases, tax lease, EETC aircraft financing, manufacturer support, operating leasing, airline cash, and profits, as well as export credit gu...