Financial sustainability in the airline industry: Panel evidence from leading global carriers

This study aims to identify the key financial drivers of profitability-based financial sustainability in the global airline industry by jointly examining Return on Invested Capital (ROIC) and Return on Assets (ROA). Using panel data from 40 of the world's largest airline companies over the 2015–2024 period, the study adopts an integrated framework that captures both capital efficiency and asset-based profitability. The results indicate that operational efficiency, measured by EBITDA Margin, and debt-servicing capacity, proxied by the Interest Coverage Ratio, are the most consistent positive determinants of both ROIC and ROA. In contrast, leverage exerts a persistent negative effect, highlighting the risks associated with excessive debt in a capital-intensive and volatile industry. Liquidity and asset turnover contribute positively to asset-based returns but have limited influence on capital efficiency, while firm size shows a negative association with both profitability measures, suggesting potential diseconomies of scale among the largest carriers. While the study does not introduce new theoretical constructs, its contribution lies in the rigorous empirical application of established financial frameworks by jointly analyzing ROIC and ROA within a unified model. From a policy perspective, the findings support regulatory and strategic initiatives aimed at enhancing industry resilience against fuel price volatility, demand shocks, and macroeconomic uncertainty.