Impact of the Germanwings Flight 9525 Air Crash: Financial Analysis and Relationship with the Media

On March 24, 2015, the largest air accident on the European continent of the last decade took place; the Germanwings Flight 9525 crashed. The main objective of this research is to determine the economic-financial impact of this air crash on the market stock price of the involved companies, Lufthansa airline, and its manufacturer Airbus. This study also contributes to determining whether the financial value of both companies was impacted by the media activity after the event. The primary methodology used is the event study methodology, applying both the market model and the Fama–French model. The results reveal that the impact of the Germanwings Flight 9525 on the financial value of the companies involved is different, since there is a significant effect on the financial value of Lufthansa under the market model, and this effect is immediate, but there is no significant effect on the financial value of Airbus with any of the models analyzed. In the same way, it happens when analyzing the impact of the media, since there is only a significant relationship between Lufthansa's share prices and the impact of media research with the market model. These results are important for the companies involved, and especially for their investors. It also shows that the manufacturing company is less vulnerable to the impact of the media, and it does not suffer significant losses on the stock market.