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American airlines’ takeover of TWA: an ex-post analysis of financial market information

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  • Flouris, Triant
  • Swidler, Steve

Abstract

This paper examines the stock market's reaction to the announcement of American Airline's takeover of Trans World Airlines, and then analyzes subsequent price movement through the completion of the merger. A second part of the analysis looks at American Airline's stock performance following the events of September 11, 2001. Given the dramatic changes to the airline industry after this national tragedy, it is possible that September 11th had further implications for the economic gains of the merger. As part of this analysis, we compare American's performance to Delta Airlines, a carrier similar in scope and size.

Suggested Citation

  • Flouris, Triant & Swidler, Steve, 2004. "American airlines’ takeover of TWA: an ex-post analysis of financial market information," Journal of Air Transport Management, Elsevier, vol. 10(3), pages 173-180.
    • Handle: RePEc:eee:jaitra:v:10:y:2004:i:3:p:173-180
    DOI: 10.1016/j.jairtraman.2003.10.002
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    References listed on IDEAS

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    1. Robert Schweitzer, 1989. "How do stock returns react to special events?," Business Review, Federal Reserve Bank of Philadelphia, issue Jul, pages 17-29.
    2. Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
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    Cited by:

    1. Yaghoub Abdi & Xiaoni Li & Xavier Càmara-Turull, 2023. "Firm value in the airline industry: perspectives on the impact of sustainability and Covid-19," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-24, December.
    2. Ho, Chun-Yu & McCarthy, Patrick & Wang, Yanhao, 2020. "Decomposing sources of gain from airline mergers: A model and case study from China," Research in Transportation Economics, Elsevier, vol. 84(C).
    3. Ho, Chun-Yu & McCarthy, Patrick & Wang, Yanhao, 2021. "Competition and countervailing power: Evidence from the China Eastern and Shanghai Airlines merger," Journal of Air Transport Management, Elsevier, vol. 91(C).
    4. Cheng, Yung-Hsiang & Yang, Ann Shawing & Liu, Yen Hua, 2009. "Financial investment behavior tendencies of air carriers," Journal of Air Transport Management, Elsevier, vol. 15(6), pages 354-356.
    5. Zhong, Z.W. & Varun, Dhir & Lin, Y.J., 2017. "Studies for air traffic management R&D in the ASEAN-region context," Journal of Air Transport Management, Elsevier, vol. 64(PA), pages 15-20.
    6. Leonard A. Jackson, 2015. "Market Reaction to Bidder Announcements of Horizontal Mergers in an Oligopolistic Industry: Evidence from the US Airline Industry," Tourism Economics, , vol. 21(6), pages 1255-1271, December.
    7. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).
    8. Jenatabadi, Hashem Salarzadeh & Ismail, Noor Azina, 2014. "Application of structural equation modelling for estimating airline performance," Journal of Air Transport Management, Elsevier, vol. 40(C), pages 25-33.

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