Airline Industry: Strategies, Operations and Safety by Connor R. Walsh

By Connor R. Walsh

This publication provides a accomplished evaluation of the innovations, operations and safeguard of the airline undefined. themes mentioned herein contain a monetary background and research of the U.S. airline undefined; outsourcing suggestions of full-service airways; measuring and benchmarking airport potency; carrier caliber and inner ameliorations between participants of the airline alliances; measures used to time table airline group below a variable workload utilizing fastened days on and days off styles; and common flyer mile utilization between passengers.

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This is at odds with conventional wisdom suggesting that economic regulation affects earnings behavior. 24 Ray R. Sturm Table 4. Mean Reversion in Earnings Using annual data, Panel A shows regression results for testing the mean reversion hypothesis in the airline industry‘s earnings over the entire sample period as follows: Pit/Ait - Pit-1/Ait-1 = α + β1[Pit-1/Ait-1 – E(Pit-1/Ait-1)] + β2[Pit-2/Ait-2 – E(Pit-2/Ait-2)] + β3 [Pit-1/Ait-1 – Pit-2/Ait-2] + β4[Pit-2/Ait-2 – Pit-3/Ait-3] + εit where Pit is the common earnings of carrier i at time t, Ait is the book value of assets for carrier i at time t and D is a dummy variable taking the value of 1 in the post-regulation period, 0 else.

That is, Delta and United airlines showed no significant difference in behavior between the periods of regulation and deregulation while American Airlines did show a difference. Given that Delta and United are not just insignificant, but highly insignificant, the outlier results of American are perplexing. However, although the results are mixed, the findings do not appear to support the intuitive argument that economic regulation has an effect on earnings behavior. B. Dividends in the Airline Industry Prior literature Nissim and Ziv (2001) investigate the relation between dividend changes and future profitability.

Therefore, I investigate the relation between macroeconomic variables as a proxy for business cycles and the risks faced by shareholders. 34 Ray R. Sturm Prior Literature Regulatory effects Previous studies examined market effects during the deliberation stage of the Deregulation Act of 1978. Edelman and Baker (1996) studied the effect on shareholder wealth of the Act‘s phase-in provisions. Based on Stigler‘s capture theory (Stigler, 1971), the market should respond negatively to the two phase-in provisions, unless the tradeoffs are perceived to be positive.

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