The cause of financial distress in the airline industryIntroductionAccording to the International Air Transport Association (IATA), the global airline industry has a 100-year history (2014) . Today, more than 3 billion passengers and 50 million tons of cargo reach their destinations each year thanks to the wonders of flight, supporting more than 57 million jobs and $2.2 trillion in economic activity (IATA, 2014 ). The airline industry plays a crucial role in the economy as it helps open up new opportunities in tourism, business and human relations, while affecting aircraft manufacturers. This is a large and growing industry that requires significant capital. The infrastructure of the aviation industry has seen drastic development in terms of quality and quantity. Nowadays, people can easily travel by plane at an affordable price. According to IATA's factsheet on global industry statistics, the total net profits of global airlines have shown remarkable instability over the past 24 years. From 1990 to 1993, due to the Gulf War and the resulting economic recession, the global airline industry reported four consecutive years of losses totaling more than $22 billion. In the late 1990s, it returned to record profitability, with total net profits exceeding $25 billion reported by the world's airlines between 1995 and 1999. Even more dramatic was the industry's plunge into record operating losses and a financial crisis between 2000 and 2005, with cumulative net losses of $40 billion. Various factors influence airline performance, such as capacity efficiency, structural changes, increased competition, slowing economy, high labor force, as well as high airfares. fuel which endanger the aeronautical industry..... .middle of paper ......al distress.4. Examine whether the price of oil has a significant impact on the financial position of airlines.5. To study the relationship between leverage and financial distress of airlines.6. To study whether there is a positive relationship between profitability and financial distress in the airline industry. Research frameworkWorks citedInternational Air Transport Association. (2014). 100 years of commercial flight. Retrieved from http://www.flying100years.com/aboutInternational Air Transport Association. (2014). Factsheet: World industrial statistics. Retrieved from http://www.iata.org/pressroom/facts_figures/fact_sheets/Documents/industry-facts.pdfBankruptcy Scores: Airline Rankings (September 28, 2011). The street. Retrieved from http://www.thestreet.com/story/11260679/1/bankruptcy-scores-ranking-the-airlines.html