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What causes an airline to go bankrupt? How airline company can avoid bankrupt

What causes an airline to go
bankrupt?
How airline company can avoid bankrupt

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Answer #1

Failure in the corporate governance mechanism of a company can lead it towards bankrupt. Further reasons may the company may be over leveraged by availing too much debts in the form of loans or has become insolvent.

An airline company can avoid bankruptcy by maintaing or placing a good corporate governance machanism in place so the company can be directed and controlled in a better way. A company with best governance practices always proved to be a well performer in a long run. Also, it protects the interests of all of its shareholders and stakeholders by being accountable and by appointing independent directors as well as non executive directors. This helps a company to be more transparent in all of its financial disclosures. The company should also have an internal as well as an external audit committees.

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