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Airline industry equities under external uncertainty shocks

Author

Listed:
  • Blampied, Nicolás
  • Mahadeo, Scott Mark Romeo

Abstract

We gauge the impact of news and other relevant external uncertainties facing airline firms via an equity market lens. Using local projections, we establish that rising investors’ fear shocks have long-lasting negative effects on airline industry equity returns, while increasing geopolitical, climate policy, and fuel cost uncertainties have comparatively short-lived impacts. Our results are robust to several alternative model specifications, including a pre-pandemic subsample. Based on our findings, we provide a promising avenue for future research in airline financial management.

Suggested Citation

  • Blampied, Nicolás & Mahadeo, Scott Mark Romeo, 2024. "Airline industry equities under external uncertainty shocks," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004786
    DOI: 10.1016/j.econlet.2024.111994
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    More about this item

    Keywords

    Airline industry; Equity market; External shocks; Uncertainty;
    All these keywords.

    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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