Location

Parker-Reed, SSWAC

Start Date

30-4-2015 9:00 AM

End Date

30-4-2015 10:55 AM

Project Type

Poster

Description

The purpose of this study is to examine how fluctuations in the price of NYMEX WTI light-sweet crude oil futures, the Consumer Confidence Index, and the S&P GSCI Aluminum TR index, as well as changes in the seasons, predict variation in airline carrier equity and airfare prices. We will run six regressions in order to distinguish the different effects of these explanatory variable on low-cost and full-service airline equity. Serving as a proxy for low-cost airlines, we use the three largest carriers in the United States: Southwest Airlines, JetBlue Airways, and Spirit Airlines. We then compare these results to those analyzing the three largest domestic, full-service airline carriers: American Airlines, Delta Air Lines, and Spirit Airlines. Through these regressions, we will determine if business model plays a significant role in how airline equity is predicted by changes in the aforementioned factors. Utilizing the same model, we will then run a regression of the aggregate airfare prices as a response variable. Through this final regression analysis we will able to determine the impact of each explanatory factors on consumers or investors of airline carriers.

Faculty Sponsor

Daniel LaFave

Sponsoring Department

Colby College. Economics Dept.

CLAS Field of Study

Social Sciences

Event Website

http://www.colby.edu/clas

ID

1818

Included in

Economics Commons

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Apr 30th, 9:00 AM Apr 30th, 10:55 AM

Equity Returns: Low-cost vs. Full-service Airline Carriers

Parker-Reed, SSWAC

The purpose of this study is to examine how fluctuations in the price of NYMEX WTI light-sweet crude oil futures, the Consumer Confidence Index, and the S&P GSCI Aluminum TR index, as well as changes in the seasons, predict variation in airline carrier equity and airfare prices. We will run six regressions in order to distinguish the different effects of these explanatory variable on low-cost and full-service airline equity. Serving as a proxy for low-cost airlines, we use the three largest carriers in the United States: Southwest Airlines, JetBlue Airways, and Spirit Airlines. We then compare these results to those analyzing the three largest domestic, full-service airline carriers: American Airlines, Delta Air Lines, and Spirit Airlines. Through these regressions, we will determine if business model plays a significant role in how airline equity is predicted by changes in the aforementioned factors. Utilizing the same model, we will then run a regression of the aggregate airfare prices as a response variable. Through this final regression analysis we will able to determine the impact of each explanatory factors on consumers or investors of airline carriers.

http://digitalcommons.colby.edu/clas/2015/program/14