03 Explain why 'capital employed' is a good way to measure the size of an airline

[Sir Afzal Shad]

03 Explain why 'capital employed' is a good way to measure the size of an airline.[3]
Hint: Airlines are capital-intensive > Their main assets (airplanes) are extremely valuable > This measure reflects the huge scale of investment required.

[M huzaifa jillani]

(KN)
Capital employed is the total value of all long term funds used in a business including money invested in assets like land,buildings and equipment.
(APP)
In the airline this includes very expensive assets such as aircraft, airports , maintenance equipment and IT systems.
(AN)
Therefore capital employed is a good way to measure the size of an airline because larger airlines will have invested much more money in planes and facilities compared to smaller ones. For example Emirates Airlines has far greater capital employed than a small regional airline showing its larger scale of operations.

[Abdur Rehman khan]

[KN] Capital employed is the total value of assets used in a business, so it shows how much investment is made up in the business.
[APP] For example, airlines need to invest heavily in expensive assets like airplanes, airports slots, and maintenance facilities as they are their main assets.
[AN] This means airlines with higher capital employed own more valuable assets, operate on a larger scale and can serve more passengers worldwide.

[Naveen fatima]

[KN]Capital employed is a good way to measure the size of an airline because it shows the total value of money and assets used in the business.
[APP]For example, a large airline like Emirates uses billions in capital to buy aircraft and maintain global operations, while a small regional airline uses much less.
[AN] A higher capital employed means the airline owns more aircraft, operates more routes and invests more in services. It also shows the business has a larger scale of operations and greater financial strength.

[Fatima ibtehaj]

[KN]It is a good way to measure the size of an airline because airlines need large amounts of capital to buy and maintain aircraft, airports facilities, and technology systems.
[APP]Emirates Airlines has billions of dollars invested in aircraft, maintenance facilities, and airport lounges around the world, while a small regional airline like Airblue in Pakistan uses far less capital.
[AN]Measuring business size by capital employed is useful for airlines because it reflects the scale of investment and capacity to operate.

[Aarib Saad]

(KN)The amount of Capital Employed indicates how much output the business has, the higher the output the larger the business and vice versa.
(APP)For instance, "Honda" is a bigger car manufacturer that "Suzuki" and so will have higher output, which is indicated by the fact that Honda has more factories than Suzuki and thus more capital employed.
(AN)This in turn allows Honda to better fulfill need of people who need reliable cars, thus helping the business to maximize market share through filling these market gaps, thus better competitivity than Suzuki which is not able to fulfill needs as good as Honda.

[Abdullah Baig]

Kn
Capital employed is a good way to measure the size of an airline because airlines require large amounts of money to buy and operate expensive assets like aircraft
App
For example, a major airline like Emirates invests billions in planes, airports, and maintenance facilities while a small regional airline might only own a few aircraft showing that higher capital employed represents greater investment in assets and reflects a much larger operational scale
An
Therefore, measuring capital employed is effective for airlines as it shows the level of financial resources and investment needed to run large scale air operations

[Abdullah Altaf]

[KN]Capital employed is a financial measure representing the total long-term funds invested in a business to generate profits.
[APP] For instance, an airline like Qatar Airways requires substantial capital investment in its fleet of airplanes, airport infrastructure and technology systems whereas a smaller regional airline will have a significantly lower capital employed due to its smaller operation.
[AN]Therefore measuring the size of an airline using capital employed is effective because it accurately reflects the scale of investment, the operational capacity, and the overall financial strength of the airline.

[Arham Qadri]

[KN] Because it shows the total value of asset used by a company to generate profit.
[APP] For example, airline like Singapore airline requires money/capital to be invested in the airport's infrastructure, new technology and the airplane itself. While smaller airlines usually spend less capital/money.
[AN] Measuring the size of airline using capital employed is effective because it accurately reflects the scale of investment, also shows the level of financial resources needed to run large scale air lines and it also reflects the strength of the airline/plane

[shamaim shakeel]

Capital employed means the total amount of money and assets a business uses to run its operations. (Knowledge)
For example, Emirates Airlines uses billions of dollars to buy and maintain its planes, build airports lounges, and train staff. (Application)
Airlines like Emirates are capitalintensive, their airplanes are extremely valuable, and this shows the huge investment needed to operate. Therefore, capital employed is a good way to measure the size of an airline because it reflects the large scale of resources the business controls. (Analysis)

[Muaz Aamir]

KN:
Capital employed shows the total long term money invested in a business, including owners’ capital and borrowed funds.

AP:
In the case of an airline, this includes expensive assets like airplanes, airport gates, maintenance equipment, and offices all of which require large investment.

AN:
This makes it a good measure because airlines need huge amounts of capital to buy and maintain aircraft. A bigger airline will usually have more planes, facilities, and staff, so its capital employed will be higher. It also reflects the airline’s ability to operate on a larger scale and handle more passengers and routes compared to smaller competitors.

[Haiderabbas]

KN: Airlines are capital intensive so they use more machinery and equipment than labor.
APP: The main asset of PIA: airplanes are extremely expensive so take a huge chunk of their investment.
AN: Hence capital employed directly reflects fleet and scale. investors compare capital employed across airlines bcz it captures the expensive long term assets that define airline size so its a clear benchmark.

[Uqbah hadeed kayani]

[kn] Capital employed measures the total value of assets and investments used by a business.
[app] For example, airlines like Emirates spend billions on aircraft, terminals, and maintenance hubs.
[an] A higher capital employed shows greater investment capacity, wider operations, and stronger ability to serve more passengers and routes.

[Abdullah Mohsin]

[KN] Airlines are mostly capital intensive.
[APP] This is becasue airlines like Qatar airways have invested billions of dollars in airplanes, airport lounges and maintanance facilities, while a regional airline might only invest in a low quantity of planes worth millions, helping indicate the business size and operational capacity.
[AN] The more the planes, the higher the capital employed, showing greater investment and a stronger ability to counter a rise in demand as Qatar Airways has many airplanes on hand.

[Shuraim Arif]

(KN) Most airlines are capital intensive.
(APP) Airlines spend a lot on buying airplanes, airport lounges etc. This can help figure out and differentiate between large airlines and small airlines. For example, Emirates, well known large airline business, has airport lounges all over the world besides having a large fleet of the world's most trusted aircraft. On the other hand, Flyadeal, a budget airline that people barely know of, has some of the world's smallest aircraft and has almost no lounges in their home country as well.
(AN) This means that airlines that are bigger in size invest a lot more in capital compared to those that are smaller. This means customers are offered more luxury on bigger airlines, making them willing to pay for the added features of brand image and luxury, eventually, making them loyal to airlines like Emirates.