Determinants of Aviation Profitability: The Case of Ethiopian Airlines
No Thumbnail Available
Date
2017-02
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
In order to be competitive, profitability of a firm plays an undeniable role and investigation of
the factors determining profitability of a firm would provide useful insights. Therefore, the main
purpose of the study is to show factors that determine Ethiopian Airlines profitability. The
dependent variable profit was regressed against growth, liquidity, leverage, tangibility of asset,
lease and fuel cost, to show which factor determine Ethiopian profitability. The study used
explanatory research design and multiple regression model is used to show the impact of the
independent variables on the dependent variable. The study used quantitative and qualitative
data, obtained from secondary source from 1981-2015.The data was analyzed using time series
econometrics methodology. The analysis is done by using E-view 8. The result revealed that fuel
cost, liquidity and leverages are statically significant to explain the dependent variable. Besides,
tangibility of asset, lease cost and leverage ratios have negatively correlated with Ethiopian
airlines profitability. Finally, it is recommended that the airline should have more concern
to liquidity, fuel and leverage than growth and tangibility of asset.
Keywords: Ethiopian airlines, Profitability, internal factors, financial statement.
Determinants of Ethiopian Airlines profitability
Description
Keywords
Ethiopian airlines; Profitability; internal factors; financial statement.