An analysis of profitability of the world’s major airlines

Tae Hoon Oum and Chunyan Yu

Journal of Air Transport Management, 1998, vol. 4, issue 4, 229-237

Abstract: This paper analyses airline profitability through an examination of the changes in their productivity growth and the ability to markup prices above costs. A yearly panel data of 22 major airlines over the 1986–1995 period is used. Despite the fact that the European carriers were subjected to a more rapid rise in input prices and a faster decline in airfares than their North American counterparts, they achieved a faster growth in profitability since the early 1990s thanks to their higher productivity growth caused largely by the increased competition in Europe. Although overall profitability of the industry has improved during the 1990s, there are significant variations across airlines because of their differential capabilities to deal with the increasing competition and input prices.

Keywords: Profitability; Productivity; Prices; Airlines (search for similar items in EconPapers)
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:4:y:1998:i:4:p:229-237

DOI: 10.1016/S0969-6997(98)00023-4

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