BANKRUPTCY PREDICTION ANALYSIS OF FIVE AIRLINES COMPANIES IN ASIA USING THE ALTMAN Z-SCORE

• Main Author: Fitri, Elda
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/38998
• Institution: Institut Teknologi Bandung

Airline industry is one of the promising industry for investors, it considered a big deal as it predicted to grow rapidly during for the next 20 years. Asia Pacific forecasted as the main player for airline in 2034, which will surpass Europe and North America. SKYTRAX Global Airlines Awards 2018 are announced Singapore Airlines as the best airlines in the world, followed by other airlines in Asia as the top 10. Nevertheless airline industry also known for its volatility business, due to the big amount of operating cost, such as unstable fuel price and the high cost of labor. Both are the main reasons for several airlines companies that stated default these past years. The purpose of this research is to predict the bankruptcy possibilities of five listed airlines company in Asia, which included as the best airlines in the world. This research will also analyze the ability of Altman Z”-Score and Altman Z-Score to predict the bankruptcy event in non-manufacturer companies by using Coefficient Correlation method. This research will be conducted by using the Original Altman Z-Score for manufacturing company and the Revised Altman Z” Score for nonmanufacturers company which will predict the bankruptcy event for the next two or three years. The sample of this research are Garuda Indonesia, Singapore Airlines, THAI Airways, All Nippon Airways, and EVA Air during the period of 2014-2018. Both formulas of Altman indicates similar result of bankruptcy event with the same predicted condition in Grey Zone are for the next 2 – 3 years. The original and the revised formula shows a good ability to predict the bankruptcy event in airlines company in Asia by having highly correlated variables for each formula.