| Summary: | 碩士 === 國立成功大學 === 國際企業研究所碩博士班 === 93 === This research examines the stock market reactions to the airline route-terminating announcements by using event study analysis. The uniqueness of the airline industry makes the route-terminating announcement an important issue to the society. Some previous studies already investigated the market reactions to terminating announcements of product, project or plant operation. The empirical evidence shows that when the investors have complete information about the operation of the announcing company, the termination announcements will be accompanied by positive market reactions. On the contrary, when the investors do not have complete information about the announcing company, the termination announcements will be accompanied by negative market reactions.
The sample in this study is composed of 89 announcements made by 18 airlines from 1983 to 2003. Based on the empirical findings, no clear impact of route termination to the stock price can be found. But terminations that are related with firm specific reasons and that terminate multiple routes at the same time will have lower two days cumulative abnormal return. Also, there is a negative relation between the growth opportunity of airline and two days cumulative abnormal return.
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