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Another Airline Crash

The news that Japan Airlines had collapsed isnt new, but it was a perfect example of a business without a focus. Under pressure from the goverment to maintain unprofitable but supposedly prestigious routes and yet at the same time having to operate as a business, it was seemingly caught between two stools. And also suffered from the inertia and lack of flexiblity which has bedelived so many Japanese businesses over the past couple of decades

Now this isnt to say that one model of transport provider is better than another, Many frequent travellers will certainly have warmer feelinsg towards nationlised rail systems in europe than they will towards Ryanair. But being neither one thing or the other surely leads to confused management and a lack of focus? Business failures arent just identified by balance sheet analysis. A credit managers role will be very simliar to that of a banker (without the bonuses…). Its all credit a the end of the day, whether it comes from the trading or the financial markets

Airlines are probably the most risky of all businesses for Credit management. Paddy Power, the Irish bookmakers recently ran a market on the next airline to fail (I got my bet wrong). The reasons for this are manifold and maybe i will address this next time around.

http://www.nytimes.com/2010/01/20/business/global/20jal.html

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