Baggage Fees and Airline Stock Performance: A Case Study of Initial Investor Misperception
2012 ◽
Vol 51
(1)
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In response to increasing fuel costs, airlines began introducing baggage fees as a new source of revenue, fees which have since been increased. In this study, an event study methodology is used to examine the impact of these announcements on airline stock prices. The results indicate that the initial announcements led to negative abnormal returns for the announcing firm and other competing airlines, as they were interpreted as a sign of industry weakness. However, the results also show that subsequent increases in baggage fees, which had been shown to positively impact the airline’s financial performance, are associated with positive abnormal returns.
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2021 ◽
Vol ahead-of-print
(ahead-of-print)
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2018 ◽
Vol 15
(3)
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pp. 23-31
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2021 ◽
Vol 16
(5)
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pp. 122
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2012 ◽
Vol 29
(1)
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pp. 79
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2005 ◽
Vol 08
(01)
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pp. 167-184
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Keyword(s):
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