Impact of covid pandemic on market valuation of largest aircraft manufacturers

Abstract

The COVID-19 pandemic has significantly affected the global economy, with a significant impact on the transport sector. It also directly influenced the market valuation of the most important aircraft manufacturers – Boeing and Airbus. Our research shows how investors responded to the spread of the disease and increased market risk. In the case of sudden events, such as serious accidents, investors react immediately, while in the case of the pandemic, despite its global scale, the reaction of investors was delayed, with an impact on the current development of the pandemic in the countries where trading takes place. The risk is thus underestimated at the beginning of the pandemic, which is followed by panic shopping and selling at the moments when the pandemic peaks in the USA and EU. It has also been found that it is not possible to reduce the risk of investment diversification between those companies that react very similarly to the threat of pandemic. Based on the correlation between the trend of share prices of the above aircraft manufacturers and the number of ill people, it can be stated that investors do not effectively take advantage of opportunities to reduce risk and increase returns in this area. The paper also presents further research in the field of the impacts of the pandemic and further global development.