Situation of European airlines caused by COVID-19: restrictions, government subsidies and future prospects
Abstract
The COVID-19 pandemic has been an unprecedented crisis, severely affecting the economy and many sectors, including the airline industry. This paper reviews this situation to see how airlines have acted since the beginning of COVID-19. The airline industry is dependent on financial support and subsidies to cope with the massive drop in air travel due to the coronavirus. The support received by the major airlines has been examined. In addition, a comparison has been made of all the aviation restrictions that have been implemented by different European governments. Travellers from countries with a higher incidence of cases, or with a growing rate of cases, have the most restrictions on travel to other countries. Furthermore, the strategies and protocols being implemented by certain airlines following the lifting of some of the restrictions on passenger air traffic are analysed. This paper will provide an insight into how airlines are coping with this unfavourable environment, as well as some of the future prospects and strategies of the aviation sector.
Keyword : airlines, COVID-19, economy, subsidies, aviation sector, air restrictions
How to Cite
Cifuentes-Faura, J., & Faura-Martínez, U. (2021). Situation of European airlines caused by COVID-19: restrictions, government subsidies and future prospects. Aviation, 25(4), 232-240. https://doi.org/10.3846/aviation.2021.15882
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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ACI Europe. (2020). Latest traffic data shows disastrous COVID-19 impact on airport industry. https://www.aci-europe.org/media-room/270-latest-traffic-data-shows-disastrouscovid-19-impact-on-airport-industry.html
Agence France-Presse. (2020). Crash landing: Global air transport hit hard by virus. https://www.ednh.news/crash-landingglobal-air-transport-hit-hard-by-virus/
Akbar, Y. H., & Kisilowski, M. (2020). To bargain or not to bargain: Airlines, legitimacy and nonmarket strategy in a COVID-19 world. Journal of Air Transport Management, 88, 101867. https://doi.org/10.1016/j.jairtraman.2020.101867
Albers, S., & Rundshagen, V. (2020). European airlines’ strategic responses to the COVID-19 pandemic (January-May, 2020). Journal of Air Transport Management, 87, 101863. https://doi.org/10.1016/j.jairtraman.2020.101863
Amankwah-Amoah, J. (2020). Note: Mayday, Mayday, Mayday! Responding to environmental shocks: Insights on global airlines’ responses to COVID-19. Transportation Research Part E: Logistics and Transportation Review, 143 (November 2020), 102098. https://doi.org/10.1016/j.tre.2020.102098
Ash, L. (2020). Bailout will stop air France operating short domestic flights. Simple Flying. https://simpleflying.com/air-francebailout-domestic-flights/
Budd, L., Ison, S., & Adrienne, N. (2020). European airline response to the COVID-19 pandemic – contraction, consolidation and future considerations for airline business and management. Research in Transportation Business & Management, 37 (December 2020), 100578. https://doi.org/10.1016/j.rtbm.2020.100578
Cifuentes-Faura, J. (2021). Analysis of containment measures and economic policies arising from COVID-19 in the European Union. International Review of Applied Economics, 35(2), 242–255. https://doi.org/10.1080/02692171.2020.1864300
Colli, F. (2020). The end of ‘Business as Usual’? COVID-19 and the European Green Deal. In European Policy Brief, Nr. 60, May 2020. http://www.egmontinstitute.be/content/uploads/2020/05/EPB60.pdf?type=pdf
Dube, K., Nhamo, G., & Chikodzi, D. (2021). COVID-19 pandemic and prospects for recovery of the global aviation industry. Journal of Air Transport Management, 92, 102022. https://doi.org/10.1016/j.jairtraman.2021.102022
Dunn, G. (2020a). The story of the coronavirus impact on airlines in numbers. FlightGlobal. https://www.flightglobal.com/strategy/how-the-airline-industry-has-been-hit-by-the-crisis/138554.article?adredir=1
Dunn, G. (2020b). Air France terminates A380 fleet with immediate effect. FlightGlobal. https://www.flightglobal.com/fleets/air-france-terminates-a380-fleet-with-immediate-effect/138463.article
Eurocontrol. (2020). COVID-19 Impact on European Air Traffic. https://www.Eurocontrol.int/sites/default/files/2020-09/covid19-Eurocontrol-comprehensive-air-traffic-assessment-992020.pdf
Euronews. (2020). Coronavirus second wave: Which countries in Europe are experiencing a fresh spike in COVID-19 cases? https://www.euronews.com/2020/09/11/is-europe-having-acovid-19-second-wave-country-by-country-breakdown
European Centre for Disease Prevention and Control. (2020). An agency of the European Union. https://www.ecdc.europa.eu/en
Habersang, S., Kuberling-Jost, J., Reihlen, M., & Seckler, C. (2019). A process perspective on organizational failure: a qualitative meta‐analysis. Journal of Management Studies, 56(1), 19–56. https://doi.org/10.1111/joms.12341
Hollinger, P. (2020). How coronavirus brought aerospace down to earth. Financial Times. https://www.ft.com/content/3fe8a876-7d7c-11ea-8fdb-7ec06edeef84
Iacus, S. M., Natale, F., Santamaria, C., Spyratos, S., & Vespe, M. (2020). Estimating and projecting air passenger traffic during the COVID-19 coronavirus outbreak and its socio-economic impact. Safety Science, 129, 104791. https://doi.org/10.1016/j.ssci.2020.104791
International Air Transport Association (IATA). (2020). Industry Losses to Top $84 Billion in 2020. https://www.iata.org/en/pressroom/pr/2020-06-09-01/
Lindstrom, M. (2020). The COVID-19 pandemic and the Swedish strategy: Epidemiology and postmodernism. SSM – Population Health, 11, 100643. https://doi.org/10.1016/j.ssmph.2020.100643
Monmousseau, P., Marzuoli, A., Feron, E., & Delahaye, D. (2020). Impact of Covid-19 on passengers and airlines from passenger measurements: Managing customer satisfaction while putting the US Air Transportation System to sleep. Transportation Research Interdisciplinary Perspectives, 7, 100179. https://doi.org/10.1016/j.trip.2020.100179
OAG. (2020). Flight database & Statistics. https://www.oag.com/
Patel, T., & Wilkes, W. (2020). Europe starts stumping up billions for cash-strapped airlines. Bloomberg. https://www.bloomberg.com/news/articles/2020-04-26/europe-starts-stumpingup-billions-for-cash-strapped-airlines
Petrauskaite, G. (2020). Ryanair sells €850 million bond, the first in three years. Aerotime. https://www.aerotime.aero/gabriele/25853-ryanair-sells-850-million-bond-the-first-inthree-years
PwC. (2020). COVID-19: UK industry focus – Where next for aviation? Strategy & Part of the PwC network.
Reuters. (2020a). Ryanair targets 400 million euros in share placement. https://es.reuters.com/article/idUKL8N2G0551
Reuters. (2020b). UPDATE 1-Wizz Air expands in western Europe as crisis brings opportunities. https://www.reuters.com/article/wizz-air-expansion/update-1-wizz-air-expands-in-westerneurope-as-crisis-brings-opportunities-idUSL8N2DB5SW
Shotter, J., & Chazan, G. (2020). Poland’s Lot airline pulls out of Condor deal. Financial Times. https://www.ft.com/content/1f3e5a38-304a-4186-9341-fef44266eefd
Sweney, M. (2020). Lufthansa agrees €9bn bailout with German government. The Guardian. https://www.theguardian.com/business/2020/may/26/lufthansa-9bn-bailout-german-government-coronavirus-flights
Transport & Environment. (2020). Bailout tracker. https://www.transportenvironment.org/challenges/planes/subsidies-inaviation/bailout-tracker/
World Today News. (2020). Europe – million-dollar aid begins to reach airlines waiting to resume flights amid crisis. https://www.world-today-news.com/europe-million-dollar-aid-begins-to-reach-airlines-waiting-to-resume-flights-amid-crisis/
Zhang, F., & Graham, D. J. (2020). Air transport and economic growth: a review of the impact mechanism and causal relationships.Transport Reviews, 40(4), 506–528. https://doi.org/10.1080/01441647.2020.1738587