WAYS TO AVOID BANKRUPTCIES: AVIATION INDUSTRY IN THE UNITED STATES

Bankruptcy serves as a legal process for resolving debt issues among firms, individuals, and occasionally governments when they are unable to meet their financial obligations. This process can be initiated by either the debtor, seeking protection from creditors due to severe financial distress, or by the creditors, who may force bankruptcy proceedings if the debtor fails to comply with payment demands. While often viewed as a stigma, bankruptcy provides a structured way to manage debt and halt aggressive creditor actions, offering a path to financial recovery. The aviation industry has witnessed remarkable growth, with global passenger numbers escalating from 1.9 billion in 2004 to 4.5 billion in 2019. This expansion has significantly contributed to the global economy, employing 65.5 million people and generating $2.7 trillion in economic impact in 2018. The surge in demand has attracted numerous entrepreneurs and investors to establish or expand airlines. Despite this, the U.S. airline sector has experienced recurrent financial challenges, with 212 airlines filing for bankruptcy since 1978. This study investigates the factors influencing financial stability within the aviation industry through the lens of 14 participants. The research emphasizes the pivotal role of leadership in navigating financial instability. Key findings suggest that effective leadership strategies and financial management practices are crucial for mitigating bankruptcy risks. Future research should focus on applying these insights to refine financial practices and leadership approaches, potentially through targeted training programs aimed at improving financial risk management and enhancing organizational stability.