The impact of operational performance of full-service carrier airlines on stock prices during COVID-19

The COVID-19 pandemic was a sudden shock to the aviation industry. Home lockdowns and the closure of national borders caused a historic drop in passenger numbers and operational indicators. This study examines how the operational performance indicators of full-service airline companies affected their stock prices during and after the COVID-19 pandemic. Monthly data from 2019 to the third quarter of 2024 were collected for Turkish Airlines, Lufthansa, and American Airlines, representing full-service airlines in Türkiye, Europe, and the USA. The analysis focuses on the effects of operational performance indicators, such as Available Seat Kilometers (ASK), Revenue Passenger Kilometers (RPK), Load Factor (LF), Passenger Numbers (PN), and Flight Numbers (FN) on stock prices. The data were analyzed using panel data and time series econometric models with R software. The findings reveal that the load factor (LF) operational performance indicator has a positive and statistically significant effect on stock prices during the COVID-19 period for the selected airlines, while the other indicators had no effect. In addition, it was found that the stock prices of these airlines were strongly influenced by their past values during the pandemic. This may be due to the perception of investors created by the pandemic's macroeconomic effects. Another result of the study is that the impact of the pandemic on stock prices was only short-term and did not have a statistically significant impact in the long term. The data also indicate that the operational performance indicators of all the examined airlines experienced a sudden drop at the beginning of the pandemic. However, the recovery levels varied among the airlines. Lufthansa's indicators did not return to pre-pandemic levels, while American Airlines managed to reach them. Turkish Airlines significantly surpassed its pre-pandemic operational levels. Regarding stock prices, it was observed that Lufthansa and American Airlines struggled to recover their pre-COVID values. At the same time, Turkish Airlines stood out by exceeding them and showed a substantial positive upward divergence.