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Will COVID-19 Threaten the Survival of the Airline Industry?

Author

Listed:
  • Xiao Xuan

    (School of Business, Ningbo University, Ningbo 315211, China)

  • Khalid Khan

    (College of Finance, Qilu University of Technology, Jinan 250353, China)

  • Chi-Wei Su

    (School of Economics, University of Qingdao, Qingdao 266000, China)

  • Adnan Khurshid

    (School of Economics and Management, Zhejiang Normal University, Jinhua 321004, China)

Abstract

The pandemic causes social distancing and lockdown, which impedes consumer confidence and contracts the economy. Hence, this study analyzes the corona (COVID-19) impact on the airline industry revenues (ALR) and forecast by the vector autoregression (VAR) method. The results indicate that gross domestic product (GDP) and air cargo are the best predictors of ALR. The forecasting outcomes explore if ALR will decline and expect to back to pre-COVID-19 in 2023. Our results resemble both the V-shaped and U-shaped, which suggests slow gradual recovery with longer lockdown and border disclosure. The government can restore confidence building by providing economic stimulus packages and can encourage the airline to return to travel. Furthermore, softening the passenger rules concerning the refund of unflown ticket, reducing taxes, and reducing overflight taxes, all reduce the costs. Similarly, the mutually recognized global standards are crucial for effective execution, and any temporary measures taken by the government should have a clear exit strategy. The study major limitation includes the lack of relevant research and data availability.

Suggested Citation

  • Xiao Xuan & Khalid Khan & Chi-Wei Su & Adnan Khurshid, 2021. "Will COVID-19 Threaten the Survival of the Airline Industry?," Sustainability, MDPI, vol. 13(21), pages 1-18, October.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:11666-:d:662069
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    References listed on IDEAS

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    Cited by:

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    2. Khan, Khalid & Su, Chi-Wei & Khurshid, Adnan & Umar, Muhammad, 2022. "COVID-19 impact on multifractality of energy prices: Asymmetric multifractality analysis," Energy, Elsevier, vol. 256(C).
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    4. Adnan Khurshid & Abdur Rauf & Sadia Qayyum & Adrian Cantemir Calin & WenQi Duan, 2023. "Green innovation and carbon emissions: the role of carbon pricing and environmental policies in attaining sustainable development targets of carbon mitigation—evidence from Central-Eastern Europe," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(8), pages 8777-8798, August.
    5. Mengxuan, Tian & Khan, Khalid & Cifuentes-Faura, Javier & Sukumaran, Sheiladevi, 2024. "Technological innovation and energy efficiency in central Eastern European countries," Utilities Policy, Elsevier, vol. 88(C).

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