Cash Management of Multinational Airlines: A Case Study on A Turkish Airline

Yıl 2023, Cilt: 7 Sayı: 1, 73 - 82, 17.03.2023

Yaşar Köse , Ceyda Aktan

https://doi.org/10.30518/jav.1202568

Öz

Cash is a vital resource for airline companies, which are said to be operating on a multinational level. From executing day-to-day operations to exploiting new investment opportunities, airline companies must maintain an optimal level of cash. The amount of cash level depends on a number of factors such as the company's activity level, the current conjuncture and international markets. In this study, the net cash flows and the changes in the level of cash and cash equivalents account of the flag carrier airline operating in Turkey, which can be considered as an international company, were analyzed using data of 2020, cash flows. In addition, company's relations with the IATA Clearing House were determined, evaluated and interpreted in term of cash management. The fact that there are very few studies in the national and international literature on the analysis, evaluation and interpretation of cash flows in the airline industry makes this study unique.

Anahtar Kelimeler

Cash Management, Multinational Companies, Airlines, Airline Finance, Netting Systems, Cash Flows

Destekleyen Kurum

-----

Proje Numarası

----

Teşekkür

---

Kaynakça

• Al-Kwifi, O. S., Farha, A. K. A. and Zaraket, W. S. (2020). Competitive Dynamics Between Multinational Companies and Local Rivals in Emerging Markets. FIIB Business Review, 9(3), 189-204.
• Amankwah-Amoah, J. and Debrah, Y. A. (2011). The evolution of alliances in the global airline industry: A review of the African experience. Thunderbird International Business Review, 53(1), 37-50.
• Bates, T., Kahle, K. and Stulz, R. (2006). Why do U.S. firms hold so much more cash than they used to? NBER working paper series. Vol. w12534.
• Brigham, E. F. and Houston, J. F. (2009). Fundamentals of Financial Management, South-Western Cengage Learning.
• Campbell, J. L., Dhaliwal, D. S., Krull, L. K. and Schwab, C. M. (2018). US multinational corporations’ foreign cash holdings: An empirical estimate and its valuation consequences. SSRN 2277804.
• da Costa, M. B. and Nagano, M. S. (2014). Evolutionary models in cash management policies with multiple assets. Economic Modelling, 39, 1-7.
• Deveci, M., Çiftçi, M. E., Akyurt, İ. Z. and Gonzalez, E. D. S. (2022). Impact of COVID-19 pandemic on the Turkish civil aviation industry. Sustainable Operations and Computers, 3, 93-102.
• Erel, I., Jang, Y. and Weisbach, M. S. (2020). The corporate finance of multinational firms (No. w26762). National Bureau of Economic Research.
• Eitman, K. D., Stonehill, L. A. and Moffett, H. M. (2011). Multinational Business Finance (12th ed). Pearson
• Fernandes, N. and Gonenc, H. (2016). Multinationals and cash holdings. Journal of Corporate Finance, 39, 139-154.
• Foley, C. F., Hartzell, J. C., Titman, S. and Twite, G. (2007). Why do firms hold so much cash? A tax-based explanation. Journal of financial economics, 86(3), 579-607.
• Galimidi, B.V. (2010). İşletmelerde nakit yönetimi ve bu çerçevede bir finansal analiz örneği (Doctoral Dissertation). Ankara University, Ankara, Turkey.
• Gu, T. (2017). US multinationals and cash holdings. Journal of Financial Economics, 125(2), 344-368.
• Jensen, M. C. (1986). Agency costs of free cash flow, corporate finance and takeovers. Am Econ Rev, 76, 323–329.
• Jiang, J. and Wu, S. (2022). The effects of cash-holding motivation on cash management dynamics. Research in International Business and Finance, 59, 101542.
• Kabakçı, A. (2011). Çokuluslu işletmelerde merkezi nakit yönetimi ve havuzlama. Dokuz Eylül Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 13(1), 97-110.
• Keynes, J. M. (1936). The General Theory of Employment, Interest, and Money. Macmillan, London.
• Kusnadi, Y. and Wei, K. J. (2011). The determinants of corporate cash management policies: Evidence from around the world. Journal of Corporate Finance, 17(3), 725-740.
• Manoel, A.S. and Moraes, C.M. (2022). The impact of internationalization degree on cash levels: Evidence from Latin America: International Business Review, 31 (101949), 1-9.
• Masson, D. J. (1983). A cash management model for the multinational corporation (Dissertation). Indiana University, USA.
• Myers, S. C. (1984). The capital structure puzzle. J Finance, 56, 575–592.
• Pinkowitz, L., Stulz, R. M. and Williamson, R. (2012). Multinationals and the high cash holdings puzzle (No. w18120). National Bureau of Economic Research.
• Ramirez, A. and Tadesse, S. (2009). Corporate cash holdings, uncertainty avoidance, and the multinationality of firms. International Business Review, 18(4), 387-403.
• Srinivasan, V. and Kim, Y. H. (1986). Payments netting in international cash management: a network optimization approach. Journal of International Business Studies, 17(2), 1-20.
• So, J. and Zhang, F. (2022). The effect of cultural heterogeneity on cash holdings of multinational businesses, Research in International Business and Finance, 61 (101660),
• Tsamenyi, M. and Skliarova, D. (2005). International Cash Management Practices in a Russian Multinational. Managerial Finance, 31(10), 48-64.
• Ünlü, Ö. (2010). Çokuluslu işletmelerde nakit yönetimi ve kuramsal bir uygulama (Doctoral Dissertation). Dokuz Eylül University, İzmir, Turkey.
• Vasigh, B., Fleming, K. and Humpreys, B. (2015). Foundation of Airline Finance: Methodology and Practice. Routledge: Taylor and Francis Group.
• von Eije, H. and Westerman, W. (2002). Multinational cash management and conglomerate discounts in the euro zone. International Business Review, 11(4), 453-464.
• Westerman, W. and von Eije, H. (2005). Multinational Cash Management in Europe Towards Centralisation and Disintermediation: The Philips Case. Managerial Finance, 31(10), 65-74.
• Wu, W., Yang, Y. and Zhou, S. (2017). Multinational firms and cash holdings: Evidence from China. Finance Research Letters, 20, 184-191.
• Wündisch, K. (1973). Centralized cash management systems for the multinational enterprise. Management International Review, 13(6), 43-57.
• Yalçıner, K. (2012). Uluslararası Finansman. Detay Yayıncılık, Ankara.
• Yilmaz, H. (1999). İşletmelerin Finansal Yönetiminde Nakit Akış Rasyo Analizi. Dokuz Eylül Üniversitesi İktisadi İdari Bilimler Fakültesi Dergisi, 14(1), 185-198.
• https://www.iata.org/en/pressroom/pr/2021-24-02-01/ (accessed 03.01.2022).
• https://www.iata.org/contentassets/c81222d96c9a4e0bb4ff6ced0126f0bb/iata-annual-review-2020.pdf, (accessed 14.12.2021).
• https://investor.turkishairlines.com/documents/finansal-raporlar/tl-thyao-formsrk-aralik_2020.pdf, (accessed 14.12.2021).