Purchase Solution

Long-term debt financing -United Airlines

Not what you're looking for?

Ask Custom Question

Discuss the impact of United Airlines moving from long-term debt funded aircraft purchasing to lease financing. Consider factors such as the impact on the asset value of the airline, debt-asset ratios, debt-equity ratios, cost of capital, and potential effects on shareholder rights in a bankruptcy filing, and the long-term responsiveness to evolutions in consumer demand.

Purchase this Solution
Solution Summary

The expert examines long-term debt financing for United Airlines.

Solution Preview

Dear Student,
ANSWERS

If United Airlines move how it finances the purchase of its aircraft from long term debt to lease, then its capital structure would also change. For example, lease payables would not be recorded and the leased aircraft recognized at the present value of periodic lease obligations. This also means that the ...

Purchase this Solution
Free BrainMass Quizzes
Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

View More Free Quizzes
Related BrainMass Solutions

  • Information provided by accounting systems

    The long-term financing from banks and leasing companies are provided.

  • Capital Structure Decision and Cost of Capital

    The combination of different financing options is called capital structure and consists of long-term debt, preferred stock, and net worth. Most companies raise funds by means of equity or debt.

  • Financing Foreign Operations

    256723 Financing Foreign Operations: United Airlines in Japan with yen debt United Airlines recently inaugurated service to Japan and now wants to finance the purchase of Boeing 747s to service that route.

  • Financial analysis of Southwest Airlines

    In it current liabilities have increased by whopping 67% and long term debt has increased by 30% in 2007.

  • Analyzing liability, calculating debt-to-equity ratio, and minimizing company risk

    Long term debt less current maturities consists of Southwest's aircraft purchase financing facilities, three Boeing 737 aircraft's financed under a fixed-rate facility, eight Boeing 717 aircraft's were pledged as collateral for obligations linked to enhanced

  • Highly leveraged Industries

    Companies in more stable, regulated markets can afford debt/equity ratios that are a tad higher. Airlines: Airline financing is quite complex, since airlines are highly leveraged operations.

  • Finance Companies

    This means that the company should use long term debt to finance its capital projects. The recommended debt equity ratio is 1.00. The Alaska Air Group, Inc will get greater financial freedom by using debt financing.

  • Mini Case: Phillips Petroleum

    Assuming that common equity increases only as a result of the retention of earnings and holding long-term debt and preferred stock equal to its 1992 balances, project Phillip's discretionary financing needs for 1993 to 1997.

  • What conditions favor the use of long-term debt?

    265879 What conditions favor the use of long-term debt? 1. When a number of alternative methods of long-term financing are under considerations; what conditions favor the use of long-term debt?

View More Related Solutions