ANALYSIS OF RELATIONSHIP BETWEEN FINANCIAL HEALTH AND MAINTENANCE COST STRUCTURE OF U.S. AIRLINE INDUSTRY

The financial structure of the airline industry is examined and compared with the cost of maintenance and fleet age. The U.S. airlines studied are the nine that were classified as major airlines as of January 1, 1990. The Spearman rank correlation test is used to show that there is a correlation between the financial structure and maintenance cost structure of the airline industry. A causal forecasting model is then proposed to predict future maintenance expenditures based on the debt ratio. However, because of inadequacies with the measurements chosen, as well as the complex nature of the airline industry, the results of the study must be considered inconclusive. Although the airlines may appear superficially similar to each other, the characteristics of their composition, such as management, debt policy, route structure, fleet mix, unionization, and marketing policies, make them unique, and it may be inappropriate to attempt to extrapolate results of the individual airlines to the industry as a whole.

Media Info

  • Features: Appendices; References; Tables;
  • Pagination: p. 43-55
  • Monograph Title: Public-Sector Aviation Issues. Graduate Research Award Papers 1989-1990
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00611990
  • Record Type: Publication
  • ISBN: 030905107X
  • Files: TRIS, TRB
  • Created Date: Aug 31 1991 12:00AM