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The COVID-19 Pandemic, Air Transport Perturbation, and Sector Impacts in ASEAN Plus Five: A Multiregional Input–Output Inoperability Analysis

Author

Listed:
  • Tamat Sarmidi

    (Faculty of Economics and Management, Universiti Kebangsaan Malaysia)

  • Norlin Khalid

    (Faculty of Economics and Management, Universiti Kebangsaan Malaysia)

  • Muhamad Rias K. V. Zainuddin

    (Faculty of Business, Economics and Social Development, Universiti Malaysia Terengganu)

  • Sufian Jusoh

    (Institute of Malaysian and International Studies, Universiti Kebangsaan Malaysia)

Abstract

This study simulates the sector impacts of demand-side perturbations on air transport sectors due to the COVID-19 pandemic, focusing on ASEAN members plus Australia, China, Japan, the Republic of Korea, and New Zealand. This study involves (i) the generation of a multiregional input–output table from the latest Global Trade Analysis Project data, (ii) a network analysis to determine the importance of the air transport industry in each country, (iii) multiplier and linkages analyses, (iv) determinations of sector impacts from demand-side perturbations on air transport sectors due to the COVID-19 pandemic, and (v) simulation of the effect of fiscal and monetary measures to mitigate the pandemic’s impact. This study demonstrates that the aviation industry is a key sector in domestic and regional economic activities, and the reduction in air transport consumer demand due to the pandemic is estimated to cause gross domestic product (GDP) reductions from 0.4% to 2.1%. Government intervention, through fiscal and monetary policies, has, however, mitigated severe impact, moderating GDP and value-added losses. Thus, a viable policy prescription for the aviation industry is of utmost importance.

Suggested Citation

  • Tamat Sarmidi & Norlin Khalid & Muhamad Rias K. V. Zainuddin & Sufian Jusoh, 2021. "The COVID-19 Pandemic, Air Transport Perturbation, and Sector Impacts in ASEAN Plus Five: A Multiregional Input–Output Inoperability Analysis," Working Papers DP-2021-01, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:dp-2021-01
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    References listed on IDEAS

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    5. Akyildirim, Erdinc & Corbet, Shaen & Efthymiou, Marina & Guiomard, Cathal & O'Connell, John F. & Sensoy, Ahmet, 2020. "The financial market effects of international aviation disasters," International Review of Financial Analysis, Elsevier, vol. 69(C).
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    Cited by:

    1. Michelle Limenta & Lili Yan Ing, 2022. "Indonesia’s Local Content Requirements: Assessment with WTO Rules," Working Papers DP-2021-47, Economic Research Institute for ASEAN and East Asia (ERIA).

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    Keywords

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    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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