A study on the measurement of financial performance of airline companies by TOPSIS and ratio analysis

In this study, ten years financial performances of ten airline companies between 2010-2019 were tried to be measured by ratio analysis and TOPSIS multiple decision making method. The 10 airline companies selected homogeneously in terms of accounting period and business model among the 15 airlines that generate the most revenue in the world are as follows: Delta, American, United, Lufthansa AG, Air France-KLM ,International Airlines Group (IAG), China Southern,, Air China, China Eastern and Air Canada. The objective of the study is to measure the financial performance of airlines using ratio analysis and TOPSIS multiple decision making method and to interpret the results. The data used in the study were obtained from the financial statements and annual reports published by the airline companies on their official websites. While choosing the KPI, the studies in the literature were examined and the following financial ratios were selected in four groups: Liquidity ratios (current ratio, cash ratio), financial structure ratios (financial leverage, dept to equity ratio, fixed asset / equity ratio), operating ratios (asset turnover, receivables turnover, equity turnover) and profitability ratios (return on equity, return on assests, operating margin, net profit margin). In addition to these, the model of the study was created by adding the two important airline performance criteria (revenue passenger kilometer, load factor) as a fifth group. As a result of the study, it was seen that the findings obtained by ratio analysis and TOPSIS method are consistent with each other. In TOPSIS ranking results; IAG, Air Canada, Delta and United were predominantly higher, while companies based in China ranked lower. According to the findings of the ratio analysis, it has been determined that airline companies have low profit margins and cannot generate stable profits, their assets are mainly financed by high debts, their fixed assets are concentrated, they bear liquidity risk, and they have financial risks such as the debt equity balance is not fully established.