Research Brief: Airline Industry Factors

This brief examines S&P Capital IQ’s industry-specific factors for the global airline industry. The seven airline industry factors contained in S&P Capital IQ’s Alpha Factor Library consist of ratios widely used by airline industry analysts. The factors address airline profitability in terms of growth, capacity utilization, and operating efficiency.

By applying the factors to regime analysis, we find:

• During periods of low fuel price increases industry growth factors are most effective.
• During periods of high fuel price growth, efficiency factors stand out.
• During periods of high revenue passenger growth our studies show that both growth and fuel efficiency factors performed well.