The global aviation industry has been changing very rapidly in recent years, most of all because of evolving technology and commercial models. These changes have also impacted the sector in India, forcing Indian airline companies to face new and unpredictable challenges, not always successfully. The bankruptcy of Jet Airways (JA) is a relevant but still ‘unsolved’ example in this respect. In the following study, the financial structure of the corporation is the object of investigation, with the aim to understand whether financial turbulence for an airline company can constitute an antecedent for predicting the risk of bankruptcy. A combined evaluation using the Altman Z-score, Piotroski F-score, and Beneish M-score highlights that financial instability works as a bankruptcy predictor (through Z- and F-scores) in the case under analysis, at the same time excluding (through M-score) potential earnings manipulation as financial malpractice
THE STRANGE CASE OF THE JET AIRWAYS BANKRUPTCY - A FINANCIAL STRUCTURE ANALYSIS
Rossi M;
2020-01-01
Abstract
The global aviation industry has been changing very rapidly in recent years, most of all because of evolving technology and commercial models. These changes have also impacted the sector in India, forcing Indian airline companies to face new and unpredictable challenges, not always successfully. The bankruptcy of Jet Airways (JA) is a relevant but still ‘unsolved’ example in this respect. In the following study, the financial structure of the corporation is the object of investigation, with the aim to understand whether financial turbulence for an airline company can constitute an antecedent for predicting the risk of bankruptcy. A combined evaluation using the Altman Z-score, Piotroski F-score, and Beneish M-score highlights that financial instability works as a bankruptcy predictor (through Z- and F-scores) in the case under analysis, at the same time excluding (through M-score) potential earnings manipulation as financial malpracticeI documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
