review: income statement

http://www.theprovince.com/business/story.html?id=1996031

summary:
This article is about the world airlines are starting to loss over US$10-million dollars. The global economic storm really threatens airline industries, for instance, IATA (International Air Transport Association) stated that revenue might slump about 15% in 2009. Further more, IATA director general and chief executive Giovanni Bisignani said the revenue can not return to the level which before the global economic storm. Most of the airlines are losing about US$5-millions every year after the storm. Also, the oil prices have risen up and they expect passenger traffic to fall. Lastly, Mr. Bisignani announced that the bottom line of the crisis with total loss of about US$27-billions, it damage more than the damage of 9/11.

Connection (redo):
The connection between the article and accounting is airline’s income. Their revenue had drop a lot compare with the days before the recession. Most airlines are losing millions every year after the economic storm; also the oil price has risen up. There are no way that airline can still made any large net profit, and some even bankrupt. From all those sources, it can prove the net income will transform to net lost in the airline industries. Furthermore, while the oil price goes up the price for airplane tickets may rise up too, even though everyone is experiencing the economic recession. Therefore, there will be no more people taking the airplane for short distance trip; people may get trains, ships, or coach instead. If the airlines remain the same price, the quality and service of the airplane may reduce. For instance, there will be fewer air hostess serve customers, or customer may need to pay for their meals in airplane or even pay for the luggage that people bring. Do people willing to pay an separate airplane ticket and pay all of their meals and luggage? Will people still want to get on an airplane that lack of quality services?

reflection:
It reflects that the global economic storm really pulls our standard of life down. Many people do not have extra money to go travel or buy a flight ticket. And the worst is that the gasoline and oil’s price has rise up a lot. This makes the airline industries harder to do. They can not make big difference for flight ticket but they actually can not make any money in this time, and they even need to money to continue for their business. It proves that most people’s revenue did drop, and it will not be rise up in short term.