Wow Air, Primera Air, Flybe, XL…..
What do the above have in common?
Well, they’re budget airline carriers who operate in a no-frills capacity.
It’s estimated that around 30% of airlines who start to operate go bust within the first two to three years of trading.
But why?
Simply because of high operating costs, broken down primarily with large fuel costs and high end operating leases, wage bills leaving many of these airlines scraping the barrel of their overdraft.
This article from the Independent showcases that if we, as consumers, aren’t careful, we too could get stuck in the middle of nowhere
… if the carrier that we are travelling on goes bust.
Larger airlines are always going through restructuring to make sure they can carry on and keep themselves up in the air.
Aside from this, it’s imperative to keep an eye on your overall numbers and operating costs.
Accountants – how often do your Clients review your SLAs with your Suppliers?
Are they ensuring that what they’re doing is correct and meets your level of expectations?
Are they tied in at all, and if so what kind of services are you getting back?
It might be worthwhile to encourage your Clients to review their Suppliers.
Keep them on their feet and get them to play ball to see that the service you were offered in the first place is still the same going forward.
Going insolvent isn’t the way forward.
You would be better off trying to salvage the business as it’s currently operating.
Get your Clients to rejuvenate their cashflow – either by collecting on those outstanding Invoice and/or keeping those high end operating expenses down.
Get in touch if you have any further questions about cashflow.