Date of Publication
3-2023
Document Type
Bachelor's Thesis
Degree Name
Bachelor of Science in Accountancy
Subject Categories
Accounting
College
Ramon V. Del Rosario College of Business
Department/Unit
Accountancy
Thesis Advisor
Joy Lynn R. Legaspi
Defense Panel Chair
Cynthia P. Cudia
Defense Panel Member
Michelle A. Ang
Abstract/Summary
Over the years, financial stability has remained a pressing issue for the aviation industry because of cutthroat competition, high fixed costs, and unstable demand for air transport. Airline companies around the world are particularly susceptible to financial distress during socio-economic shocks which significantly reduce the demand for air travel such as the 9/11 attacks. The recent Covid-19 pandemic has had a devastating impact on airlines, with several large carriers worldwide filing for bankruptcy. A key element of airline profitability is their ability to maximize their capacity utilization, which allows them to generate revenues that are more than sufficient to cover their high fixed costs. Due to the global economic condition, revisiting the impact of aircraft capacity utilization on the bankruptcy probability of airlines would be timely. The latest studies were conducted primarily for companies in a single location and failed to include data relating to airline companies during Covid-19. Hence, we sought to assess the impact of aircraft capacity utilization on bankruptcy probability of publicly-listed airline companies in Asia, Europe, and the Americas from 2002 to 2021 using data from Refinitiv Eikon. Controlling for both firm attributes (firm age and firm size) and external factors (GDP growth rate and jet fuel prices), we found that aircraft capacity utilization does not significantly impact the bankruptcy probability of airlines overall. However, we found evidence among European airlines that higher aircraft capacity utilization leads to higher bankruptcy probability.
Abstract Format
html
Language
English
Format
Electronic
Keywords
Aircraft industry; Bankruptcy; COVID-19 Pandemic, 2020- —Influence
Recommended Citation
Huang, T. T., Lin, L. A., & Siscar, J. A. (2023). The impact of aircraft capacity utilization on bankruptcy probability before and during Covid-19: Evidence from publicly-listed airlines in Asia, Europe, and the Americas from 2002 to 2021. Retrieved from https://animorepository.dlsu.edu.ph/etdb_acc/50
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Embargo Period
4-19-2026
