Originally posted by Duesseldwarf
Mongu

With the exception of group bookings, low cost, ticketless airlines typically charge the credit card for the booking before the booking is confirmed nowadays. Traditional airlines will collect the payment upon issuing the ticket. The (sale) revenue is recognised once the booking is confirmed, as you’d probably expect.

However, airlines are obviously interested in how much money a flight has actually earned once it has flown, so the earned/flown revenue is recognised after the flight is closed. There may well be a change inthe numbers due to changed dates, death, refund of flexible tickets etc etc.

With the low cost airlines, who don’t offer any refunds, I’d imagine the three things (booked seat/payment/earned revenue) could more or less be recognised at the same time as nothing will (or nothing should) change (perhaps except death?). It varies from airline to airline, but I expect most airlines look at all the figures from bookings made to earned revenue at the different stages.

At the end of the day – we all want to see the money in the bank. Not something all airlines have the luxury of being able to see unfortunately!

I’m still confused.

If the financial year end is (say) 31 January 2004, but a credit card is charged for a flight in (say) November 2004….what happens with that reservation in the books?

It would be incorrect to take the profit straight away, because it relates to a different (future) period.

Also, the airline may well “charge” the credit card, but they won’t receive the cash from the card company until maybe a month later.

My guess would be to take the sale to the Balance Sheet, as an asset (credit card debtor firstly, then cash when the credit card company pays up) and a matching liability (the obligation to provide the service). When the first leg is completed, I would release the liability to profit. Maybe I’d apply the rules on long term contracts to future travel, taken collectively…

The costs would be treated differently, on the basis that they ultimately filter through and it would be more prudent to simply treat them as expenses.

But I’m just guessing – I’ve never worked on the accounts of an airline and I’m just curious as to how the bookkeeping is done.

Good programme, although do Swissair pilots really have American accents? :rolleyes:

For those who missed it, the finding of the programme was essentially that faulty wiring caused some electrical arcing in the roof, behind the first officer. There was speculation that the 1st class IFE system may have generated too much heat, making it worse.

The arcing set fire to a poly-something insulation, which padded the aircraft skin.

Such insulations are banned by the FAA as a result, with effect from 2005.

Not always Hand.

The UK bought some Longbow Apaches, but apparently they are useless. The government was against them on cost grounds, but the Army pressurised the decision because “they wanted a gucci helicopter”.

Do you have CCTV in these places?

Jeez, have a thought for the poor guys workload Garry!

I think a lot of airlines are candidates, although US carriers seem to dislike the big jets these days for some reason.

When Air Canada sorts itself out, they look a good bet. They would be viable even if only used YYZ-LHR, as with South African and the order purely for JNB-LHR.

I agree with Interflug, BA will be shamed into replacing their 747s with the A380 in the next decade. That could be a huge order – 50+ aircraft. They’re too heavily weighted toward the 777 now and need more 747-sized aircraft. Their long haul fleet will be 772, 773ER and A380 for a long time.

Well, the EU pact is absolute rubbish anyway. The French have a moral duty to break it.