The macroeconomic environment and airline profitability: A study of us regional airlines

Ismail H. Genc; Jon R. Miller; Dogan Gursoy

doi:10.3727/108354206781040768

The macroeconomic environment and airline profitability: A study of us regional airlines

Ismail H. Genc, Jon R. Miller, Dogan Gursoy^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

4 Citations (Scopus)

Abstract

In this article, a SARMAX(p,s,q) model is utilized to study the macroeconomic determinants of regional airline profitability in the US. While seasons have an impact on profitability, no season seems to differ from another. Findings indicate that wealth has more relevance than income on the profitability variable. The cost of capital and unemployment negatively affect airlines. Although small, the lagged values of profitability mostly have a perverse effect on the current profitability, indicating the absence of a sustained growth performance in the industry. Even though 9/11 has negatively affected regional airlines, this study fails to find a statistically significant support for that observation. In addition, findings suggest that inflation in general and the real price of oil do not have statistically significant effects.

Original language	English
Pages (from-to)	381-395
Number of pages	15
Journal	Tourism Analysis
Volume	11
Issue number	6
DOIs	https://doi.org/10.3727/108354206781040768
Publication status	Published - 2006
Externally published	Yes

Bibliographical note

Publisher Copyright:
© 2006 Cognizant Comm. Corp.

Keywords

9/11
Airlines
Sarmax

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10.3727/108354206781040768

Cite this

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AB - In this article, a SARMAX(p,s,q) model is utilized to study the macroeconomic determinants of regional airline profitability in the US. While seasons have an impact on profitability, no season seems to differ from another. Findings indicate that wealth has more relevance than income on the profitability variable. The cost of capital and unemployment negatively affect airlines. Although small, the lagged values of profitability mostly have a perverse effect on the current profitability, indicating the absence of a sustained growth performance in the industry. Even though 9/11 has negatively affected regional airlines, this study fails to find a statistically significant support for that observation. In addition, findings suggest that inflation in general and the real price of oil do not have statistically significant effects.

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The macroeconomic environment and airline profitability: A study of us regional airlines

Abstract

Bibliographical note

Keywords

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