Assessing the influence of unplanned oil supply outages on airline stock connectedness
研究了计划外石油供应中断对航空公司股票市场关联性的影响，发现非OPEC国家的供应中断影响更大，对航空公司的风险管理和燃料对冲有政策启示。
Fuel is one of the airline industry's most significant inputs and accounts for 30 % of an airline's total expenses on average. Airline companies' prices are sensitive to the crude oil market fluctuations. Unfortunately, no existing literature has focused on the influences of unplanned oil supply outages on the airline stock market performance. By employing the connectedness method proposed by Diebold and Yilmaz (2009, 2012), we first contribute to existing studies by investigating the predictability relationship between the total spillovers index and unplanned oil supply disruptions in both OPEC and non-OPEC countries. Notably, we observe that fluctuations in the total spillovers index closely align with events in the oil market. Furthermore, it becomes evident that non-OPEC oil supply disruptions exert a more substantial influence on the total volatility spillovers index in comparison to their OPEC counterparts. Finally, we conclude by highlighting the significant policy implications arising from our findings including diversifying oil supply sources and prioritizing risk management strategies in airlines' fuel hedging practices.