Impact of privatization on airlines performance: an empirical analysis

Mahdy I. Al-Jazzaf

Journal of Air Transport Management, 1999, vol. 5, issue 1, 45-52

Abstract: This paper examines the impact of privatization on airlines performance in 10 countries. The empirical analysis suggests an overall positive evidence on performance. More specifically, sales grow rapidly and net income, total assets, capital expenditures, and dividends increase moderately after privatization. Furthermore, efficiency and yield improve after privatization. However, profitability slightly declines after privatization due to increases in capital investment spending and airlines financial and administrative restructuring costs. In contrast to many decision makers’ fears, the findings indicate an increase in the size of employment after privatization. Though the findings support privatization of state-owned airlines to reap these benefits, the specific circumstances of an airline under consideration should be well studied prior to proceeding with privatization.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:5:y:1999:i:1:p:45-52

DOI: 10.1016/S0969-6997(98)00036-2

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