Investigating the Relationships Between Oil Prices and Airline Stock Values

The primary objective of this research is to reveal the causal relationship between the stock values of Turkish Airlines and Pegasus Airlines, both listed on the Borsa Istanbul, and the price of Brent crude oil. Turkish Airlines, a pioneer in this regard, was launched on the stock exchange on December 20, 1990. Pegasus Airlines, Turkey's second-largest aviation company, began trading on the stock exchange on April 26, 2013. In this research, the monthly stock prices of the two airlines between May 1, 2013, and January 31, 2025, as well as Brent crude oil prices during the same period, were used as data. Toda Yamamoto's causality analysis was used. To establish the econometric model used in the study, the stationarity of the time series must first be examined. The unit root tests show that the stock and Brent crude oil values are stationary at level one. Accordingly, the analysis was conducted by adding one to the obtained lag length to calculate the length for the Toda-Yamamoto analysis. The analysis found a unidirectional causality between Brent crude oil prices and the two companies' stocks. The study demonstrates the relationship between two aviation sector companies traded on Borsa Istanbul and the oil variable, a significant expense item, and a key macroeconomic variable. In this regard, due to the limited number of studies conducted on this topic in the literature, this study is expected to fill a significant gap.