FINANCIAL PERFORMANCE IN AIRLINES: APPLICATION OF TOPSIS IN FOUR TRADITIONAL EUROPE-BASED AIRLINES

The purpose of this study was to measure the financial performance of four large traditional airlines based in Europe using TOPSIS method. Airlines need to measure their financial performance in order to accurately manage their future and the steps to be taken as a result of these measurements should be determined. In this study, the financial performance of Turkish Airlines, Air France-KLM, British Airways and Lufthansa was measured for the first time using TOPSIS and based on the financial data between 2013 and 2018. A six-year review was conducted to make the assessment sufficient and accurate. The financial statements between 2013 and 2018 of the concerned airlines were utilized. The data obtained from the balance sheets and income statements were converted into financial performance indicators by performing necessary operations. TOPSIS was then applied to the financial performance indicators. To achieve the stated objective, financial ratios were calculated and then the TOPSIS was used to translate the values to a single score showing overall company performance. The calculated performance scores were then used to classify the enterprises. The study observed that the performance scores of airlines generally fluctuated during the analysis period. However, looking at the overall six-year period, the Air France-KLM partnership showed a distinct divergence by ranking first in performance in four different years. Lufthansa also displayed a divergence by ranking second place in four different years. British Airways, on the other hand, ranked in different positions over the six-year period while Turkish Airlines ranked third and fourth in the first five years of the six-year period and rose to first place in the last year, 2018.

Keywords

Financial Performance, Ratio Analysis, TOPSIS, Air Transport