The Impact of Serious Safety Incidents on Airline Stocks

The impact of commercial airplane crashes on the shareholder wealth US-listed airline stocks has been focus many prior studies, but none have explored concomitant trading volume. We expand scope studies to include near crashes. examine 262 ‘incidents’ from 1962 2018 (220 with return evidence) and document a significant (negative) for fatalities casualties, an insignificant incidents no casualties. find that log-transformed volume spikes upward in three-day crash-period window remains abnormally high three plus weeks follow crash when casualties occur. interpret level post-event be consistent noise trader hypothesis: naïve hoping take advantage stock over-reaction – which we do not detect.