@article{Gritta:208042,
      recid = {208042},
      author = {Gritta, Richard D. and Adams, Brian and Adrangi, Bahram},
      title = {An Analysis of the Effects of Operating and Financial  Leverage on the Major U.S. Air Carriers’ Rates of Return:  1990-2003 by Richard D. Gritta, Professor of Finance R.B.  Pamplin Jr. School of Business, University of Portland  Portland, Oregon gritta@up.edu Brian Adams, Assistant  Professor of Finance R.B. Pamplin Jr. School of Business,  University of Portland Portland, Oregon adamsbr@up.edu  Bahram Adrangi, Professor of Economics R. B. Pamplin Jr.  School of Business, University of Portland Portland,  Oregon},
      address = {2006-03},
      number = {1427-2016-118525},
      pages = {15},
      year = {2006},
      abstract = {The history of the US airline industry has been composed  of a series of “boom/bust”
cycles, capped by periods of  near panic. The record losses of the early 1990s  were
followed by the record profits of the late 1990s, only  to be supplanted again by the record
economic losses  starting in 2000 (and exacerbated by the events of 9/11).  Since
deregulation, over 145 carriers have filed for  receivership, and the industry still remains
in fragile  shape in spite of the success of a few members like  Southwest and Jet Blue.
Many industry analysts argue that  the industry’s problems are the result of high labor
costs,  fuel cost spikes, overcapacity, etc. The authors do not  deny the effects of these
factors on the carriers’ plight,  but there is a deeper, more fundamental factor at  work.
That factor is the tremendous over leverage, both at  the operating and financial levels,
present to this  industry. The purpose of this paper is to explore this  leverage situation and
examine the effects on air carrier  profitability that results from this state.},
      url = {http://ageconsearch.umn.edu/record/208042},
      doi = {https://doi.org/10.22004/ag.econ.208042},
}