A Comparative Analysis of Financial and Operational Performance Pre - And Post-IPO: With a Focus on Airline Companies

Soomi Lee, Hayoung Kim, Namryo

Abstract

In this study, the financial and operational performance of 12 global LCCs before and after going public with IPOs are compared and analyzed. The analysis reveals that the current ratio increases and the leverage decreases in multiple sample enterprises after an IPO. It is also observed that profitability improves, although this finding is not consistent. These results indicate that enterprise liquidity improves and that management will actively seek improvement activities based on the inflow of large amounts of funding provided by the IPO. Asset turnover, which is an activity index, decreases, but this is interpreted as a temporary phenomenon that appears because the investment assets increase compared to sales as funds are secured. In addition, it is confirmed that after an IPO, operational performance indicators, including the load factor (seat occupancy), ASK (available seat kilometers), and RPK (revenue passenger kilometers), also improve.