Relationship between Crude Oil Price Changes and Airlines Stock Price: The Case of Indian Aviation Industry

Chinnadurai Kathiravan, Murugesan Selvam, Balasundram Maniam, Sankaran Venkateswar


The present study investigated the relationship between airline stock price and crude oil price. For this study, six airlines such as Air India, Go Air, IndiGo, Jet Lite, Jet Airways and Spice Jet and three crude oil markets, WTI-West Texas Intermediate and Texas Light Sweet, Brent -North Sea Brent Crude, and Dubai-Dubai Crude, were selected Based on their market capitalization. According to empirical results, a Crude oil price triggered fluctuations in most of the airline stock returns. Moreover, Air India, IndiGo, Jet Airways and Spice Jet experienced statistically significant relationships between their stock returns and crude oil price but did not correlate with them during the study period from 1st January 2007 to 30th November 2018. The findings of present study would be useful for individual and institutional investors and policy makers.

Keywords: Crude Oil Price, Airline Stock Return, Descriptive Statistics, Unit Root Test, Correlation Matrix, Granger Causality Test.

JEL Classifications: G11, G14, G15, Q43, R40


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