Airline failure and distress prediction: a comparison of quantitative and qualitative models

In this paper, an exploratory study of failure and distress prediction models is presented based on a qualitative survey among new-entrant airline managers and a quantitative data source containing financial and traffic data of new-entrant airlines. Using logistic regression, it became evident that qualitative variables are a viable source for model construction. They contribute to a deeper understanding of the underlying distress and failure process. A number of significant predictor variables are discussed in the context of managing new-entrant airlines.