Mathematical Modeling of the Financial Impact of Air Crashes on Airlines and Involved Manufacturers

Despite air transport being the safest way to travel, accidents still happen, which incur massive costs and many consequences for industry society. The main objective of this research is determine financial impact crashes by distinguishing between fatal non-fatal events their effect on market stock price involved companies airlines manufacturers. This study also aims contribute literature about Event Study Methodology determining model two most employed in methodology (Market or Fama-French model) provides more accurate results. results reveal that harmed when an crash occurs include airline, regardless causes if it was a event. However, with events, differs depending event’s outcome. In any case, effects are immediate, especially same day event occurred. Nevertheless, manufacturing firms show no negative abnormal returns after crash. Finally, Market study. These important investors since they mistrust losses only occur airline involved, accident fatal. turn, our provide reassurance such occurrence. has shown both manufacturers must continue promote improve safety.