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Financial Management Dissertations

S/B/522. Dissertation. Procurement Decisions in Airline Industry: Real Options Approach and Bargaining in Bilateral Negotiations

WORDS:

11700

DATE:

2009

PRICE:

119.99 GBP

The dissertation examines the application of real options analysis (ROA) in the evaluation of investment decisions exploring the concepts of real options and bargaining in bilateral negotiations within the airline industry. The review of literature touches on the real options theory and its use in aircraft evaluation, the issues of bargaining in bilateral negotiations over aircraft purchasing, the background of the airline industry and associated risks, the methods of aircraft evaluation, etc. A case study of the hypothetical company Airline Limited (AL) is conducted to explain different capital budgeting techniques used in the US airline industry and to evaluate AL's decision to buy Airbus A300. The methods of the study include the use of Porter's 5 Forces analytical model. Conclusions are made about the value of the purchase option in the described scenario and the solution to the bargaining problem in the negotiations between the aircraft producer and the airline.

KEYWORDS: Dissertation, Procurement, Airline Industry, real options analysis, ROA, aircraft evaluation, investment appraisal, Bargaining, negotiations, Airline Limited, Airbus A300, Boeing, Porter’s 5 Forces,