Safety and the Economic and Financial Performance in the Airline Industry: Is there any relationship?

Abstract

Safety has always been and is a key management aspect in the airline industry. Airline companies, airport management, aviation staff and air traffic control perform the impossible to ensure the lowest possible number of accidents and incidents for minimizing the number of fatalities. The main objective of this paper is first, to determine and analyze literature published concerning safety in the airline business and, second, to see the relationship between safety and other related economic and financial indicators. The sample used is a collection of international airlines included in the JACDEC safety index, considering longitudinal data for the years 2011-2015. The results revealed a non-significant effect for safety on the profitability of the airline companies, whereas a significant effect of safety on airlines' revenues was shown.