Oil Price Volatility and Stock Returns of International Airlines

Posted: 21 May 2024

See all articles by Dasauki Musa

Dasauki Musa

Babcock University

Jonathan Chukwudi Obi

Babcock University, Ogun state, Nigeria

Date Written: April 04, 2024

Abstract

This study examines the impact of oil price volatility on the stock prices of selected international airlines from 2009 to 2024, including the effects of the COVID-19 pandemic and the Russia-Ukraine war. Data from the Federal Reserve Bank of St. Louis and Yahoo Finance was analyzed using GARCH models, revealing a negative correlation between oil prices and airline stock prices. The COVID-19 pandemic and the Russia-Ukraine conflict significantly increased stock volatility, particularly for SkyWest, Southwest, and Alaska Air. The study recommends diversifying the energy mix and implementing technology to reduce reliance on fossil fuels, mitigating systematic risks in the airline industry.

Keywords: Oil price, Airlines, stock price, COVID-19, Russia-Ukraine War, Volatility, GARCH

Suggested Citation

Musa, Dasauki and Obi, Jonathan Chukwudi, Oil Price Volatility and Stock Returns of International Airlines (April 04, 2024). Available at SSRN: https://ssrn.com/abstract=4833663

Dasauki Musa (Contact Author)

Babcock University ( email )

Jonathan Chukwudi Obi

Babcock University, Ogun state, Nigeria

Babcock University, Deparment of Economics
Ogun State
Nigeria

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