THE EFFECT OF EXCHANGE RATE, INFLATION, INTEREST RATES, AND CRUDE OIL PRICE ON FINANCIAL DISTRESS IN THE AIR TRANSPORTATION SUB-SECTOR LISTED ON THE INDONESIA STOCK EXCHANGE OF THE PERIOD 2012-2021

Abstract

The companies in the air transportation subs-sector experienced financial distress in multiple years between the period of 2012-2021 due to the global uncertainty and the existence of the COVID-19 pandemic. This study intends to ascertain the effect of the exchange rate, inflation, interest rates, and crude oil prices on financial distress in the air transportation sub-sector listed on the Indonesia Stock Exchange of the period 2012-2021. The method used is descriptive and verification analysis method with a quantitative approach. The sample technique in this study uses saturated sampling. The data collection technique used is literature study and documentation. Furthermore, multiple linear regression analysis is used in the data analysis method. The results of this study state that partially the exchange rate and oil prices have a negative and significant effect on financial distress. Meanwhile, inflation and interest rates have no effect on financial distress. The results of the study simultaneously exchange rates, inflation, interest rates, and oil prices together have a significant effect on financial distress with a correlation coefficient of 81.4% which indicates a very strong relationship between variables.