Global Financial Management & Summary

Global Financial Management & Summary
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The EL AL Israel Airlines Limited is a major airline in Israel, where it provides its customers with chartered and scheduled air travel. The company also runs cargo planes that transport goods to and from Israel. In the recent years, the company has diversified its services and has been providing services in the overhaul realm of maintenance, security, selling duty free products, producing and supplying foods in the flights and also leasing their planes to the organisations and individuals.
One of the key aspects that have taken place in the last four years relates to the prices of the oil from Brent Crude. The bench marker in the oil industry has been hiking its prices steadily and this is a cause to worry about the airlines. Oil prices are one of the single most crucial costs in the airline business, given the huge amounts used on the planes as they fly across the international borders. As such, rising in price will signify that the airline will have to increase their prices or diversify in an effort to raise the profit margin. One of the measures that have been taken by the company in the recent past to try and reduce the costs of operations is by retrenching some of the staffs that are employed on a temporary basis. This is a clear indication that the oil prices are having fundamental impacts on the El AL airlines with reference to its ability to remain in business and profitable (Solomon, 2013).
The other event that has been taking place in the airline business EL AL needs to worry about is the increased competition from other chartered and scheduled airlines. There has also been rising competition from the cargo planes from other airlines. Some of the competitors that have been giving EL AL a hard time are Israir and Arkia, while, in the cargo line of operations, CAL Cargo airlines has been putting EL AL on high alert. Considering the way the company is struggling with its finances, stiff competition is working against its efforts. In connection to the same, Israel has engaged in agreement talks with the European Union to have an open sky policy. This means that, the European Union will allow more airlines from Israeli to have their planes flying to more destinations in and around Europe. This agreement will not only give EL AL more opportunities, but also will have even stiffer competition from the Israeli based airlines and the European based airlines (Ody, 2011). Given that the company has also been making losses for the last four to five years, this will be tougher on their finances as the business becomes more complicated in the light of these developments.
Market analysis is a key strategy in every organization. Therefore, EL AL will have to conduct thorough market analysis so that they have a firm basis for all the strategies that are going to follow. With the market analysis report, the company will develop an understanding of the market risks at t...