Cases For Publication (UCWC101)
Abstract

ABC AIRLINES

RAVINDRAN RAMASAMY

Many airline companies in the air industry are incurring heavy losses not due to the operating causes or lack of passengers, but due to the mismanagement of foreign currencies, as they collect the airfare in several different currencies. Moreover, after globalization local companies spread their wings to foreign countries and do businesses in foreign currencies. Hence foreign exchange assumes more and more importance in todays's business world. Like share prices these exchange rates are volatile and moving at random without any pattern. The models which try to quantify this risk still at the infant stage because of involvement of two economies, home country and host country. The foreign exchange risk which is in the form of transaction and translation is a challenging topic to teach. Hence a relevant case study covering this topic will be easy to teach and exemplify the concepts and importance of this topic. This case could be discussed in master level students because understanding foreign exchange requires sound knowledge of financial management and accounting.