Social and Behavioral Sciences Commons^™

Systematic And Idiosyncratic Risks Of The U.S. Airline Industry, Rafiqul Bhuyan, André Varella Mollick, Md Ruhul Amin

Economics and Finance Faculty Publications and Presentations

Understanding the risky nature of the airline industry has received attention in the tourism literature from separate angles. Although the systematic risk of the airline industry has been examined before, idiosyncratic risk has largely been ignored. This study fills this gap in the tourism literature by investigating the effect of passengers’ air travel on systematic and idiosyncratic risks of the U.S. airline industry. Using historical air travel data and utilizing both OLS and fixed-effect models, this paper documents negative relationships between the occupancy of airline seats and idiosyncratic risks for 21 U.S. airline companies. This negative effect of occupancy is …