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The Macroeconomic Environment and Airline Profitability: A Study of us Regional Airlines

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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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Keywords: 9/11; AIRLINES; SARMAX

Document Type: Research Article

Publication date: 2006-12-01

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  • The aim of Tourism Analysis is to promote a forum for practitioners and academicians in the fields of Leisure, Recreation, Tourism, and Hospitality (LRTH). As a interdisciplinary journal, it is an appropriate outlet for articles, research notes, and computer software packages designed to be of interest, concern, and of applied value to its audience of professionals, scholars, and students of LRTH programs the world over.
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