Airline industry equities under external uncertainty shocks

Nicolás Blampied and Scott Mahadeo

Economics Letters, 2024, vol. 244, issue C

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.

Keywords: Airline industry; Equity market; External shocks; Uncertainty (search for similar items in EconPapers)
JEL-codes: C58 G11 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004786

DOI: 10.1016/j.econlet.2024.111994

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