Determinants of the payout decision in the airline industry

Payouts play an important role in the relationship between shareholders and agents in terms of rewarding the decisions of shareholders. Previous studies have observed that payout decisions appear in different ways depending on an industry's financial and operating structures. Since the airline industry has been characterized as high debt dependency, this study presumes distinctive characteristics on payouts determinants and identifies them influencing dividend payments and share repurchases. The results indicate that firm size, cash holdings, financial leverage, and life-cycle influence dividends payments, whereas firm size, cash holdings and life-cycle stage affect share repurchase. The implications of the findings are discussed.