The impact of the crowdstrike incident in the stock market:  an event study analysis for airlines

Costa, João Francisco Maciel

http://hdl.handle.net/10400.13/7498

Use this identifier to reference this record.

Name:	Description:	Size:	Format:
Tese final_JoaoCosta.pdf		826.1 KB	Adobe PDF	Download

Send Feedback

Authors

Costa, João Francisco Maciel

Advisor(s)

Martins, António Miguel Valente

Abstract(s)

This study investigates the short-term market effect of the CrowdStrike IT outage in the airline industry. Using an event study methodology, we provide evidence that airline stocks respond significantly negatively to the technology disruption within two days before and after the event day. IT disruptions create friction in daily operations—such as schedule disruptions, flight delays or cancellations, negative externalities, and customer dissatisfaction—ultimately leading to a loss of value for airlines. The results also show that the most affected airlines are those from main CrowdStrike customer’s countries (mainly non-Asian countries) and an irrelevance of the business model. Finally, the extent of the stock market’s response to the CrowdStrike IT outage is influenced by other airline characteristics such as profitability, size, leverage, and cyber risk rating.