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2020 | OriginalPaper | Chapter

10. Assessing Airline Bankruptcy in India

Authors : Sushma Verma, Samik Shome

Published in: The Financial Landscape of Emerging Economies

Publisher: Springer International Publishing

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Abstract

The Indian aviation sector has been experiencing substantial growth in recent years. This remarkable growth, however, has not been reflecting in the financial statement of majority of the leading air carriers. In 2019, Jet Airways has been grounded due to severe financial crisis. Considering the dynamic and competitive environment in which airline companies operate, early warning signal of financial distress is extremely important. This study attempts to analyse the financial situation of selected airline companies in India using various bankruptcy predicting models viz. Altman Model, Pilarski Model, Fuzzy Logic Model and Kroeze Model. This paper examined financial data of four major national carriers viz. Indigo, Jet Airways, Air India and Spice Jet between 2014 and 2019. The scores calculated from various models have indicated that there exists financial distress among the Indian air carriers. It is observed that different models have given more or less similar predictions and grades for different air carriers in India. This study is of great relevance considering the contribution of aviation sector to the national growth and series of bankruptcy instances in this sector.

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Title: Assessing Airline Bankruptcy in India
Authors: Sushma Verma
Samik Shome
Publisher: Springer International Publishing
Book: The Financial Landscape of Emerging Economies
Print ISBN: 978-3-030-60007-5

Electronic ISBN: 978-3-030-60008-2

Copyright Year: 2020
DOI: https://doi.org/10.1007/978-3-030-60008-2_10