ECONOMIC IMPACT OF COVID-19 ON THE EUROPEAN AIRLINE INDUSTRY

Jelena Stanojević, Gabrijela Mitić, Vladimir Radivojević

DOI Number
https://doi.org/10.22190/TEME210827071S
First page
1181
Last page
1195

Abstract


Business entities from various industries are facing significant challenges since the COVID-19 pandemic outbreak. The airline industry, along with travel, tourism and hospitality, have been the worst affected economic sectors during the coronavirus health crisis. The paper analyzes the economic impact of COVID-19 on the European airline industry. The research is made by measuring the liquidity and profitability of five leading European airline companies before and after the pandemic outbreak (in the period from 2015 to 2020). The aim is to determine the extent of the health crisis consequences on the financial results of the five European companies with the largest number of passengers in 2019. The research is conducted through financial statement analysis and descriptive statistics. The results show that the COVID-19 pandemic had a significantly more detrimental effect on profitability compared to the liquidity of European airlines.

 


Keywords

airline industry, COVID-19, liquidity, profitability, European airline companies.

Full Text:

PDF

References


lah, M.A., Abdeen, S., & Kehyayan, V. (2020). The first few cases and fatalities of Corona Virus Disease 2019 (COVID-19) in the Eastern Mediterranean Region of the World Health Organization: A rapid review. Journal of Infection and Public Health, 13, 1367–1372.

Andekina, R., & Rakhmetova, R. (2013). Financial Analysis and Diagnostics of the Company. Procedia Economics and Finance, 5, 50-57.

Anuar, H., & Chin, O. (2016). The Development of Debt to Equity Ratio in Capital Structure Model: A Case of Micro Franchising. Procedia Economics and Finance, 35, 274-280.

Adrienne N. et al. (2020). Grounded aircraft: an airfield operations perspective of the challenges of resuming flights post COVID. Journal of Air Transport Management, 89, 101921.

Agrawal A. (2020). Sustainability of airlines in India with Covid-19: challenges ahead and possible way-outs. Journal of Revenue Pricing Management.

AirFrance, https://www.airfranceklm.com/en/finance/publications/results

Bielecki et al. (2020). Air travel and COVID-19 prevention in the pandemic and peri-pandemic period: a narrative review. Travel Medicine and Infectious Disease, 39, 101915.

Budd et al. (2020). European airline response to the COVID-19 pandemic – contraction, consolidation and future considerations for airline business and management. Research in Transportation and Business Management, 100578.

Chen et al. (2020). The impact of policy responses to COVID-19 on U.S. travel and leisure companies. Annals of Tourism Research Empirical Insights, 100003.

Centre for Aviation, https://centreforaviation.com/

Cornett, M.M., & Adair, T.A., Nofsinger, J. (2012). Finance, McGraw-Hill.

Dube et al. (2021). COVID-19 pandemic and prospects for recovery of the global aviation industry. Journal of Air Transport Management.

EasyJet, https://corporate.easyjet.com/investors/reports-and-presentations/2021

IATA (2020). Research points to low risk for COVID-19 transmissions in fight. Press Release No. 81, IATA Pressroom.

International Airline Groups (AIG), https://www.iairgroup.com/en/investors-and-shareholders/results-and-reports.

International Monetary Fund (2021). World Economic Outlook Report, July 2021, Available at: https://www.imf.org/en/Publications/WEO/Issues/2021/07/27/world-economic-outlook-update-july-2021 (Accessed July 29, 2021).

Lange, R. (2020). Senior Vice President at Airbus. Keynote speaker. AGIFORS 60th Annual Symposium, October 20–23, virtual platform.

Lufthansa, https://investor-relations.lufthansagroup.com/en/publications/financial-reports.html

Maneenop S. & Kotcharin S. (2020). The impacts of COVID-19 on the global airline industry: an event study approach. Journal of Air Transportation Management, 89, 101920.

Madushanka, K.H.I., Jathurika, M. (2018). The Impact of Liquidity Ratios on Profitability (With special reference to Listed Manufacturing Companies in Sri Lanka), International Research Journal of Advanced Engineering and Science, 3, 157-161.

Peoples J et al. (2020). COVID-19 and Airline Performance in the Asia Pacific region, Emerald Open Research, 2, 62.

Ryanair, https://investor.ryanair.com/results/

Sobieralski J. (2020). COVID-19 and airline employment: Insights from historical uncertainty shocks to the industry. Transportation Research Interdisciplinary Perspectives.

Suau-Sanchez P. et al. (2020). An early assessment of the impact of COVID-19 on air transport: Just another crisis or the end of aviation as we know it?, Journal of Transport Geography, 86, 102749.

Westerhof, A. (2020). Manager Revenue Management Systems at Air France–KLM. Panelist in the Revenue Management Panel: COVID-19: A chance to reset revenue management practices? AGIFORS 60th Annual Symposium.

World Health Organization (2020). Rolling updates on coronavirus disease (COVID-19). Available at: https://www.who.int/emergencies/diseases/novel-coronavirus-2019/events-as-they-happen (Accessed July 14, 2021).

World Health Organization (2021). WHO Coronavirus (COVID-19) Dashboard. Available at: https://covid19.who.int (Accessed August 17, 2021).

Yeyati, E.L., & Filippini, F. (2021). Social and economic impact of COVID-19. Brookings Global Working Paper, No. 158.

Zhang A., & Zhang Y. (2018). Airline economics and finance. In: A. Graham and N. Halpern (eds.). The Routledge Companion to Air Transport Management. 1, 171-188.




DOI: https://doi.org/10.22190/TEME210827071S

Refbacks

  • There are currently no refbacks.


© University of Niš, Serbia
Creative Commons licence CC BY-NC-ND
Print ISSN: 0353-7919
Online ISSN: 1820-7804