Araştırma Makalesi
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Macroeconomic Determinants of Financial Failure Risk in Airlines

Yıl 2023, , 425 - 437, 15.11.2023
https://doi.org/10.30518/jav.1349293

Öz

The objective of this study is to identify the macroeconomic factors that influence the risk of financial failure in the aviation industry. Within the parameters of the study, a sample of 11irline firms operating between 2009 and 2019 was analyzed to determine the factors influencing the likelihood of financial failure. The cost of fuel, interest rates, inflation rates, and currency rates were utilized as macroeconomic variables that could have an impact on airline enterprises' ability to meet ends. Financial data and macroeconomic data of the airline companies in the sample were obtained from Thomson Reuters Eikon Datastream. The methodology of the study consists of 2 stages. In the first stage, Altman Z'' Score method is used. Then, panel data analysis method is preferred to reveal the relationship between financial failure and macroeconomic factors. According to the findings of the random effects panel data study, exchange rates and interest rates have a negative impact on financial failure. The results of the changes in interest and exchange rates suggest that governments and airlines should concentrate on policies that will strengthen the aviation sector’s financial viability. To manage these risks more effectively, financial managers must closely examine the effects of rising macroeconomic risk and the corresponding financial failure effects. Airline managers, private and institutional investors should monitor policy uncertainty, assuming that exchange rate uncertainty is a driving force in financial failure. In addition, airline companies should review their hedging strategies against exchange rate risk.

Kaynakça

  • Acosta Gonzales, E., Fernandez-Rodriguez, F. and Ganga, H. (2019). Predicting corporate financial failure using macroeconomic variables and accounting data, Computational Economics, 53, 227–257.
  • Alıcı, A. (2021) Determinants of financial failure risk in airline businesses, International Journal of Aeronautics and Astronautics, 2(2), 28-40.
  • Altman, E.I. (1968). Financial ratios discriminant analysis and the prediction of corporate bankruptcy, The Journal of Finance, 23(4), 589-609.
  • Altman, E.I. (1983). Corporate Financial Distress, Wiley Intercedence, New York.
  • Altman, E. (2000) Predicting financial distress of businesses: revisiting the Z-Score and ZETA® models. Handbook of Research Methods and Applications in Empirical Finance.
  • Arilyn, E. J. (2020) The effect of financial ratios and macroeconomic variables to financial distress of agriculture ındustry listed in the Indonesia stock exchange from 2013 to 2018. Advances in Economics, Business and Management Research, 115, 17th International Symposium on Management.
  • Beaver, W. (1966). Financial ratios as predictors of failure, Journal of Accounting Research, 4: 71-111.
  • Bood L. and Ison, S. (2017). Air Transport Management – An International Perspective. Rotledge. London and Newyork.
  • Brigham, E. F. and Daves, R. P. (2018) Intermediate Financial Management, South Western Educational Publishing (13th Edition). ISBN: 978-1-337-39508-3.
  • Carter, D.A., Rogers, D.A. & Simkins, Betty J. (2002). Does fuel hedging make economic sense? The case of the U.S. airline industry, Working paper, Oklahoma State University.
  • Ceylan, I. E. (2021). The impact of firm-specific and macroeconomic factors on financial distress risk: A case study from Turkey. Universal Journal of Accounting and Finance, 9(3), 506-517.
  • Fernando, S. (2006). Risk management practices in the airline industry. Master thesis, Simon Fraser University- Faculty of Business Administration, Canada.
  • Gökbulut, R. İ. (2009). The relationship between shareholder value and financial performance measures and an application on ISE. Dissertation Thesis, Istanbul University, Istanbul.
  • Gritta R.D., Adrangi B., Davalos S. and Bright D. (2008). A review of the history of air carrier bankruptcy forecasting and the application of various models to the US airline industry: 1980-2005. Södertörn Academic Studies. 193-214.
  • Gudmundsson, V. S. (2002). Airline distress prediction using non-financial indicators, Journal of Air Transportation 7(2), 1–24.
  • Gutu, L. M., Strachinaru, A. I., Strachinaru, A. V. and Ilie, V. (2015). The macroeconomic variables’ impact on industrial production in the context of financial crisis. Procedia Economics and Finance, 32, 1258 – 1267.
  • Güngör, H., Y. (2019). Forecasting financial failures of companies: A research on airline sector, Dissertation Thesis, İnönü University, Institute of Social Sciences. Malatya.
  • Güriş, S. (2015 Panel Data and Panel Data Models. In Collective, Models, Panel Data with Stata. Istanbul: Der Publishing.
  • Harjayanti, D. R., Manurung, A. H., Ulupui, G. K. A. and Buchdadi, A. D. (2022) Prediction of financial distress, macro factors on stock prices during pandemic covid. International Journal of Business, Economics and Law, 26(1), 73- 82. ISSN 2289-1552.
  • Hsu, C. C. (2017) Applying Z-score models in aviation finance education: A Case study of some US carriers, International Journal of Education and Social Science, 4(3), 9-12.
  • IATA (2015) Exchange rates and aviation: examining the links, https://www.iata.org/en/iata-repository/ publications/economic-reports/exchange-rates-and-aviation-examining-the-links/ (Date Access: 21.08.2023)
  • IATA (2021) Outlook for the global airline industry, https://www.iata.org/en/iata- repository/publications/economic-reports/airline-industry-economic-performance---april-2021---report/ (Date Access: 21.08.2023)
  • Jackson, J. (2017). Airline Finance. Budd, L. And Ison, S. (Editörler), Air Transport Management-An International Perspective içinde (169-213). Newyork and London: Routledge Publishing.
  • Kiracı, K. (2019) Determinants of financial risk: An empirical application on low-cost carriers, Scientific Annals of Economics and Business, 66 (3), 335-349.
  • Kiracı K. ve Yaşar, M. (2018). Prediction of financial failure risks with Altman Z-Score and Springate S-Score models: An application on major airlines. 17th International Participatory Business Management Congress, Çeşme-İzmir.
  • Kumar, M. and Anand, M. (2013) Assessing financial health of a firm using Altman's original and revised z-score models: A case of Kingfisher Airlines ltd (India). Journal of Applied Management and Investments. 2, 36-48.
  • Kurtaran Çelik, M. (2009) Comparative analysis of financial failure prediction models for ISE firms. Dissertation Thesis, Karadeniz Teknik University, Instute of Social Science. Trabzon.
  • Liou, D. and Smith, M., (2006) Macroeconomic Variables in the Identification of Financial Distress. 1-37. Available at SSRN: https://ssrn.com/abstract=900284 or
  • Liu, J. (2004) Macroeconomic determinants of corporate failures: evidence from the UK. Applied Economics, 36, 939-945.
  • Loudon, G.F. (2004). Financial risk exposures in the airline industry: Evidence from Australia and New Zealand. Australian Journal of Management, 29(2), 295-316.
  • Mabkhot, H., and Hamid Abdulkhaleq Hasan Al-Wesabi (2022). Banks’ financial stability and macroeconomic key factors in GCC Countries, Sustainability 14,15999., 1-21.
  • Mantziaris, S. Z. (2015) Bankruptcy Prediction Models: An Empirical Analysis of Altman’s Z-Score Model in Forty Greek Businesses in the Period of Economic Recession. Dissertation Thesis, School of Business Administration, Department of Accounting and Finance, University of Macedonia. Macedonia.
  • McNamara R., Duncan K., and Kelly S. (2011) Micro and macro determinants of financial distress, 15th International Business Research Conference. Sydney, Australia.Nov. http://epublications.bond.edu.au/business_pubs/542
  • Morrell, P. S. (2007) Airline finance. Ashgate Publication, 3rd Edition.
  • Morrell, P. S. and Swan, W. (2006). Airline jet fuel hedging: Theory and practice. Transport Reviews, 26(3), 719-730.
  • Muien, H. M., Nordin, S. And Badru, B. O. (2022). The Impact of financial and macroeconomic variables on financial distress: Evidence from Pakistani market. Pakistan Journal of Humanities & Social Sciences Research, 5(1),
  • Nikodemus, V.T & Oktasari, D.P (2021). Effect of profitability, leverage, interest rate, and inflation on financial distress. Journal Ilmiah Manajemen dan Bisnis, 7(1), 139-154. ISSN 2460-8424.
  • Meyer, P.A. ve Pifer, H.W. (1970). Prediction of bank failures, The Journal of Finance, 25, 853-868.
  • Nouri, B. A. and Soltani, M. (2016) Designing a bankruptcy prediction model based on account, market and macroeconomic variables (Case Study: Cyprus Stock Exchange). Iranian Journal of Management Studies (IJMS), 9(1), 125-147. Online ISSN: 2345-3745.
  • Sakız, B. (2017) Risk management using financial ratios and an application in airline industry, International Conference on Eurasian Economies, 282-290.
  • Sakız, B. ve Ünkaya, G. (2018) Bankruptcy risk in airline transport sector - Airscore prediction with artificial neural networks. Marmara Üniversitesi Öneri Dergisi, 13(50), 159-172, ISSN 1300-0845.
  • Sehgal, S., Mishra, R.K. & Jaisawal, A. A (2021) A search for macroeconomic determinants of corporate financial distress. Indian Economic Review, 56, 435–461.
  • Siregar, E. M. and Siswanti I. (2022) Analysis of the effect of macroeconomic factors on financial distress in property & real estate sub-sector businesses listed on the Indonesia Stock Exchange for the 2010-2019 period, International Journal of Management Studies and Social Science Research, 4, ISSN: 2582 – 0265.
  • Springate, G.L.V. (1978). Predicting the possibility of failure in a Canadian firm: A discriminant analysis, Unpublished Master’s Thesis, Simon Fraser University, Canada.
  • Tamari, M. (1966). Financial ratios as a means of forecasting bankruptcy, Management International Review, 6(4): 15-21.
  • Tsai, B.MC. (2008). Financial risk exposures in the airline industry – Case of South African Airlines. Master Thesis, University of Cape Town, Department of Accounting, South Africa.
  • Tunahan, H., Esen, S., Takıl, D. (2016) Comparative analysis of financial risk levels of airline companies with fuzzy logic method, Finance and Auditing Studies (JAFAS), Cilt: 2(2), 239-264.
  • Vasigh B. Fleming K. ve Humphreys, B. (2015). Foundations of Airline Finance – Methodology and practice. Second edition. Routledge. ABD.
  • Yerdelen Tatoğlu, F. (2013) Panel data econometrics (Second edition b.). Istanbul: Beta Publishing House.
  • Žiković, I. T. (2016) Modelling the impact of macroeconomic variables on aggregate corporate insolvency: Case of Croatia. Economic Research-Ekonomska Istraživanja, 29(1), 515–528
Yıl 2023, , 425 - 437, 15.11.2023
https://doi.org/10.30518/jav.1349293

Öz

Kaynakça

  • Acosta Gonzales, E., Fernandez-Rodriguez, F. and Ganga, H. (2019). Predicting corporate financial failure using macroeconomic variables and accounting data, Computational Economics, 53, 227–257.
  • Alıcı, A. (2021) Determinants of financial failure risk in airline businesses, International Journal of Aeronautics and Astronautics, 2(2), 28-40.
  • Altman, E.I. (1968). Financial ratios discriminant analysis and the prediction of corporate bankruptcy, The Journal of Finance, 23(4), 589-609.
  • Altman, E.I. (1983). Corporate Financial Distress, Wiley Intercedence, New York.
  • Altman, E. (2000) Predicting financial distress of businesses: revisiting the Z-Score and ZETA® models. Handbook of Research Methods and Applications in Empirical Finance.
  • Arilyn, E. J. (2020) The effect of financial ratios and macroeconomic variables to financial distress of agriculture ındustry listed in the Indonesia stock exchange from 2013 to 2018. Advances in Economics, Business and Management Research, 115, 17th International Symposium on Management.
  • Beaver, W. (1966). Financial ratios as predictors of failure, Journal of Accounting Research, 4: 71-111.
  • Bood L. and Ison, S. (2017). Air Transport Management – An International Perspective. Rotledge. London and Newyork.
  • Brigham, E. F. and Daves, R. P. (2018) Intermediate Financial Management, South Western Educational Publishing (13th Edition). ISBN: 978-1-337-39508-3.
  • Carter, D.A., Rogers, D.A. & Simkins, Betty J. (2002). Does fuel hedging make economic sense? The case of the U.S. airline industry, Working paper, Oklahoma State University.
  • Ceylan, I. E. (2021). The impact of firm-specific and macroeconomic factors on financial distress risk: A case study from Turkey. Universal Journal of Accounting and Finance, 9(3), 506-517.
  • Fernando, S. (2006). Risk management practices in the airline industry. Master thesis, Simon Fraser University- Faculty of Business Administration, Canada.
  • Gökbulut, R. İ. (2009). The relationship between shareholder value and financial performance measures and an application on ISE. Dissertation Thesis, Istanbul University, Istanbul.
  • Gritta R.D., Adrangi B., Davalos S. and Bright D. (2008). A review of the history of air carrier bankruptcy forecasting and the application of various models to the US airline industry: 1980-2005. Södertörn Academic Studies. 193-214.
  • Gudmundsson, V. S. (2002). Airline distress prediction using non-financial indicators, Journal of Air Transportation 7(2), 1–24.
  • Gutu, L. M., Strachinaru, A. I., Strachinaru, A. V. and Ilie, V. (2015). The macroeconomic variables’ impact on industrial production in the context of financial crisis. Procedia Economics and Finance, 32, 1258 – 1267.
  • Güngör, H., Y. (2019). Forecasting financial failures of companies: A research on airline sector, Dissertation Thesis, İnönü University, Institute of Social Sciences. Malatya.
  • Güriş, S. (2015 Panel Data and Panel Data Models. In Collective, Models, Panel Data with Stata. Istanbul: Der Publishing.
  • Harjayanti, D. R., Manurung, A. H., Ulupui, G. K. A. and Buchdadi, A. D. (2022) Prediction of financial distress, macro factors on stock prices during pandemic covid. International Journal of Business, Economics and Law, 26(1), 73- 82. ISSN 2289-1552.
  • Hsu, C. C. (2017) Applying Z-score models in aviation finance education: A Case study of some US carriers, International Journal of Education and Social Science, 4(3), 9-12.
  • IATA (2015) Exchange rates and aviation: examining the links, https://www.iata.org/en/iata-repository/ publications/economic-reports/exchange-rates-and-aviation-examining-the-links/ (Date Access: 21.08.2023)
  • IATA (2021) Outlook for the global airline industry, https://www.iata.org/en/iata- repository/publications/economic-reports/airline-industry-economic-performance---april-2021---report/ (Date Access: 21.08.2023)
  • Jackson, J. (2017). Airline Finance. Budd, L. And Ison, S. (Editörler), Air Transport Management-An International Perspective içinde (169-213). Newyork and London: Routledge Publishing.
  • Kiracı, K. (2019) Determinants of financial risk: An empirical application on low-cost carriers, Scientific Annals of Economics and Business, 66 (3), 335-349.
  • Kiracı K. ve Yaşar, M. (2018). Prediction of financial failure risks with Altman Z-Score and Springate S-Score models: An application on major airlines. 17th International Participatory Business Management Congress, Çeşme-İzmir.
  • Kumar, M. and Anand, M. (2013) Assessing financial health of a firm using Altman's original and revised z-score models: A case of Kingfisher Airlines ltd (India). Journal of Applied Management and Investments. 2, 36-48.
  • Kurtaran Çelik, M. (2009) Comparative analysis of financial failure prediction models for ISE firms. Dissertation Thesis, Karadeniz Teknik University, Instute of Social Science. Trabzon.
  • Liou, D. and Smith, M., (2006) Macroeconomic Variables in the Identification of Financial Distress. 1-37. Available at SSRN: https://ssrn.com/abstract=900284 or
  • Liu, J. (2004) Macroeconomic determinants of corporate failures: evidence from the UK. Applied Economics, 36, 939-945.
  • Loudon, G.F. (2004). Financial risk exposures in the airline industry: Evidence from Australia and New Zealand. Australian Journal of Management, 29(2), 295-316.
  • Mabkhot, H., and Hamid Abdulkhaleq Hasan Al-Wesabi (2022). Banks’ financial stability and macroeconomic key factors in GCC Countries, Sustainability 14,15999., 1-21.
  • Mantziaris, S. Z. (2015) Bankruptcy Prediction Models: An Empirical Analysis of Altman’s Z-Score Model in Forty Greek Businesses in the Period of Economic Recession. Dissertation Thesis, School of Business Administration, Department of Accounting and Finance, University of Macedonia. Macedonia.
  • McNamara R., Duncan K., and Kelly S. (2011) Micro and macro determinants of financial distress, 15th International Business Research Conference. Sydney, Australia.Nov. http://epublications.bond.edu.au/business_pubs/542
  • Morrell, P. S. (2007) Airline finance. Ashgate Publication, 3rd Edition.
  • Morrell, P. S. and Swan, W. (2006). Airline jet fuel hedging: Theory and practice. Transport Reviews, 26(3), 719-730.
  • Muien, H. M., Nordin, S. And Badru, B. O. (2022). The Impact of financial and macroeconomic variables on financial distress: Evidence from Pakistani market. Pakistan Journal of Humanities & Social Sciences Research, 5(1),
  • Nikodemus, V.T & Oktasari, D.P (2021). Effect of profitability, leverage, interest rate, and inflation on financial distress. Journal Ilmiah Manajemen dan Bisnis, 7(1), 139-154. ISSN 2460-8424.
  • Meyer, P.A. ve Pifer, H.W. (1970). Prediction of bank failures, The Journal of Finance, 25, 853-868.
  • Nouri, B. A. and Soltani, M. (2016) Designing a bankruptcy prediction model based on account, market and macroeconomic variables (Case Study: Cyprus Stock Exchange). Iranian Journal of Management Studies (IJMS), 9(1), 125-147. Online ISSN: 2345-3745.
  • Sakız, B. (2017) Risk management using financial ratios and an application in airline industry, International Conference on Eurasian Economies, 282-290.
  • Sakız, B. ve Ünkaya, G. (2018) Bankruptcy risk in airline transport sector - Airscore prediction with artificial neural networks. Marmara Üniversitesi Öneri Dergisi, 13(50), 159-172, ISSN 1300-0845.
  • Sehgal, S., Mishra, R.K. & Jaisawal, A. A (2021) A search for macroeconomic determinants of corporate financial distress. Indian Economic Review, 56, 435–461.
  • Siregar, E. M. and Siswanti I. (2022) Analysis of the effect of macroeconomic factors on financial distress in property & real estate sub-sector businesses listed on the Indonesia Stock Exchange for the 2010-2019 period, International Journal of Management Studies and Social Science Research, 4, ISSN: 2582 – 0265.
  • Springate, G.L.V. (1978). Predicting the possibility of failure in a Canadian firm: A discriminant analysis, Unpublished Master’s Thesis, Simon Fraser University, Canada.
  • Tamari, M. (1966). Financial ratios as a means of forecasting bankruptcy, Management International Review, 6(4): 15-21.
  • Tsai, B.MC. (2008). Financial risk exposures in the airline industry – Case of South African Airlines. Master Thesis, University of Cape Town, Department of Accounting, South Africa.
  • Tunahan, H., Esen, S., Takıl, D. (2016) Comparative analysis of financial risk levels of airline companies with fuzzy logic method, Finance and Auditing Studies (JAFAS), Cilt: 2(2), 239-264.
  • Vasigh B. Fleming K. ve Humphreys, B. (2015). Foundations of Airline Finance – Methodology and practice. Second edition. Routledge. ABD.
  • Yerdelen Tatoğlu, F. (2013) Panel data econometrics (Second edition b.). Istanbul: Beta Publishing House.
  • Žiković, I. T. (2016) Modelling the impact of macroeconomic variables on aggregate corporate insolvency: Case of Croatia. Economic Research-Ekonomska Istraživanja, 29(1), 515–528
Toplam 50 adet kaynakça vardır.

Ayrıntılar

Birincil Dil İngilizce
Konular Ulaşım Ekonomisi
Bölüm Araştırma Makaleleri
Yazarlar

Abdulkadir Alıcı 0000-0002-4796-6385

Yayımlanma Tarihi 15 Kasım 2023
Gönderilme Tarihi 24 Ağustos 2023
Kabul Tarihi 10 Ekim 2023
Yayımlandığı Sayı Yıl 2023

Kaynak Göster

APA Alıcı, A. (2023). Macroeconomic Determinants of Financial Failure Risk in Airlines. Journal of Aviation, 7(3), 425-437. https://doi.org/10.30518/jav.1349293

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