Bankruptcy prediction analysis: application of altman z-score approach in airline industry

Identifier:  TDX:3532

Handle: https://hdl.handle.net/20.500.11797/TDX3532

Authors:  Shi, Yin

Abstract:
Bankruptcy prediction gathered increasing research interest since 1968 when Altman introduced the breakthrough bankruptcy prediction model—Altman Z-score. Air transport was one of the fastest growing industries, offering more than 80 million jobs across the world and contributing 8% to gross domestic product. The European airline industry is highly fragmented because most members of the European Union consider it is important to have a national air carrier. However, over the half of the profit of the whole industry are shared by four big airlines which lefts other airlines in a difficult situation. It is crucial to determine financial distress risk for airlines since it can provide early-warning messages on aspects that can be seen and addressed by executives and managers. The COVID-19 pandemic caused immense disruption to the global economy and resulted in a dramatic decrease in demand for air travel, which left global air carriers struggling for survival in the worst situation they have ever encountered. In recent years, the concept of corporate sustainability has increasing impact in the field of business world.