Abstract

http://ssrn.com/abstract=1496519
 
 

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Are the Bankrupt Skies the Friendliest?


Federico Ciliberto


University of Virginia - Department of Economics; Centre for Economic Policy Research (CEPR)

Carola Schenone


University of Virginia - McIntire School

December 1, 2012

Volume 18, Issue 5, December 2012, Pages 1217–1231, Journal of Corporate Finance

Abstract:     
We use data from the US airline industry to investigate whether firms that are under bankruptcy protection, as well as these firm's product market rivals, change the quality of the products they offer. We measure the quality of the services offered by a carrier using flight cancellations and delays, and the age of the aircraft used by the carrier. We find that delays and cancelations are less frequent during bankruptcy filings but return to their pre-bankruptcy levels once the bankrupt firm emerges from bankruptcy. We also find that firms use Chapter 11 filings to permanently reduce the age of their fleet. We do not find evidence of statistically and economically significant changes by the airline's competitors along any of the dimensions above.

Keywords: Bankruptcy, Chapter 11, Product market quality, Airline industry

JEL Classification: G33, L13, L93, K2

Accepted Paper Series


Not Available For Download

Date posted: October 30, 2009 ; Last revised: September 20, 2012

Suggested Citation

Ciliberto, Federico and Schenone, Carola, Are the Bankrupt Skies the Friendliest? (December 1, 2012). Volume 18, Issue 5, December 2012, Pages 1217–1231, Journal of Corporate Finance. Available at SSRN: http://ssrn.com/abstract=1496519 or http://dx.doi.org/10.2139/ssrn.1496519

Contact Information

Federico Ciliberto
University of Virginia - Department of Economics ( email )
P.O. Box 400182
Charlottesville, VA 22904-4182
United States
Centre for Economic Policy Research (CEPR) ( email )
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Carola Schenone (Contact Author)
University of Virginia - McIntire School ( email )
Charlottesville, VA 22903
United States
434-924-4184 (Phone)
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