Losing money

Question: 4

Our client, ABC Airlines, is losing money. Why?

Solution:

Remember to consider the firm’s actions as well as external market forces such as the competitive environment. Questions include asking whether other airlines are losing money, or suffering drops in profits. If so, why? Causes might range from a rise in the cost of fuel, to the need to replace most of ABC’s fleet due to stringent new government regulations, to a general slump in the economy that reduces the number of tourists and causes business customers to tighten their belts.

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