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Investment Insights

Do airline shares fly during an Olympics host bid?

Andrew Hollins

11 Jun 2018

With the choice of the 2026 Winter Olympics host country due next year, charts available on Eikon show the impact that previous IOC bid processes have had on share prices at flag carrier airlines.


  1. Airlines linked with winning bids saw significant share price gains in the month prior to their selection, with Korean Air up 16 percent and Air China up 37 percent.
  2. The winning airlines’ stock prices all fell in the month following the announcements, indicating a return to normal price behavior.
  3. The 2026 Winter Olympics host will be selected in September 2019, with seven countries involved in the initial process.

Following PyeongChang’s winning bid for the recent 2018 Winter Olympic Games, Korean Air responded by announcing discounted airfares to South Korea.

Was this a simple statement of national pride or a celebration of an anticipated financial dividend?

In this two-part series, we look at the market impact of the Winter Olympic Games on the flag carrier airlines of bidding and host countries.

We start by examining the period around host country announcements, while part two focuses on the period before and after the Games themselves.

Our focus in this piece is on the flag carrier airlines associated with Sochi 2014 (Aeroflot), PyeongChang 2018 (Korean Air) and Beijing 2022 (Air China), as well as the performance of airlines associated with shortlisted (but losing) bid countries.

By using Eikon to analyze the stock prices of these airlines, as well as global stock market activity (Global Index, the Dow Jones Transportation Average) and the airlines’ local stock markets, any impact attributable to the award of a Winter Olympic Games can be highlighted.

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Olympics host winner

Traditionally, Olympics host countries are selected by the International Olympic Committee (IOC) seven years ahead of the Games themselves: Sochi in July 2007, PyeongChang in July 2011 and Beijing in July 2015.

The standout feature from each of these periods is that airlines associated with the winning countries witnessed notable stock price gains in the month prior to their respective selection announcements: Aeroflot stock rose by 18 percent, Korean Air by 16 percent and Air China by over 37 percent.

These increases were of a magnitude greater than activity in the local stock markets, and also stood out when compared both with the wider transport sector and the global market.

In the case of Air China, its rise coincided with a fall of over 20 percent on the Shanghai stock exchange.

Air China stock price changes during the announcement period for the forthcoming Beijing games in Eikon
Air China stock price changes during the announcement period for the forthcoming Beijing games in Eikon

Losing bidders

What of the airlines associated with the losing shortlisted bids?

In the month prior to the Sochi announcement (June 2007) Korean Air (PyeongChang) was up over 8 percent while Austrian Airlines (Salzburg), which was shortly to be bought by Lufthansa, was down 10 percent.

In the month leading up to the PyeongChang vote (June 2011), Lufthansa (Munich) shares rose by 5.5 percent while Air France (Annecy) fell 1.7 percent. Air Astana (Almaty, Kazakhstan) enjoyed a modest rise of 1.6 percent in the month prior to the vote for the 2022 Games won by Beijing.

Post-announcement performance

It is worth noting that the three announcement dates in question all coincided with the beginning of periods of financial turbulence.

Summer 2007 and 2011 witnessed the onset and rekindling respectively of the global financial crisis while summer and fall 2015 saw the popping of the Chinese stock market bubble.

Therefore, while the winning airlines` stock prices all fell in the month following the announcements (Aeroflot by 8.6 percent, Korean Air by 8.1 percent and Air China by 34 percent) these moves were accompanied by falls of a similar magnitude on the local markets, the transport index and the global market.

The post-announcement picture for the airlines associated with losing bids was more mixed with a combination of company-specific factors (Austrian and Korean in 2007, Astana in 2015) and market factors (Air France and Lufthansa in 2011) seemingly having a greater impact than the announcement itself.

The stock price changes of flag-carrying airlines for Olympic Winter Games
Source: Eikon

Winter Olympics dividend?

Prior to each announcement of host countries, a rank order of favorites emerges.

This seems to be driven by the official bid assessments, independent services such as Around the Rings Power Index and GamesBids.com, as well as bookmakers odds.

Positive market sentiment then appears to crystalize around the flag carrying airline of the favorite bid.

This airline then enjoys stock price gains significantly in excess of the wider market in the month prior to the selection announcement. This is a consistent picture across all announcement periods analyzed.

This price activity extends to a much lesser degree to airlines of second favorite bids and has no impact at all for third favorites.

Return to normality

While the post-announcement price dynamic shows consistent stock price falls for the flag carriers of winning bids, this contrasts with mixed and inconclusive price behavior for the airlines of the shortlisted but losing bids.

For the winning airlines the price drops may reflect a return to market normality and/or the recognition of the seven-year period until the Games open.

For the rest, it may reflect a lower pre-vote price boost as well as a swift return to normal market behavior. However, in contrast to the pre-announcement period, given the exceptional market backdrop to these periods, it is difficult to draw conclusions for the post-announcement price behavior.

The 2026 Winter Olympics host country will be selected in September 2019. Canada’s Calgary, Austria’s Graz, Swedish capital Stockholm, Sion in Switzerland, Turkey’s Erzurum, Japan’s Sapporo and an Italian bid involving Cortina d’Ampezzo, Milan and Turin are all in the initial process.

  • In part two, we will look at the movement of shares immediately before and after the Games.

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