COVID-19 and the airline industry: crisis management and resilience

Abstract

Purpose The COVID-19 pandemic has triggered a time of crisis and uncertainty for the air transportation industry. The gloomy prospects for the industry have stretched business resilience to a critical point. The crisis has caused damage and shock that the aviation industry has never endured before. This paper aims to provide a comprehensive understanding of both internally and externally generated airline response strategies by examining business practices for crisis management. Design/methodology/approach This study screened research papers and economic reports from authoritative organizations including the International Air Transport Association, International Civil Aviation Organization, World Health Organization and United Nations World Tourism Organization from December 2019 (the month in which the COVID-19 outbreak occurred) to March 2021 (the most recent month at present). The authors also integrated publicly recognized news articles to cover a wide range of business practices in the airline industry. The authors conducted thematic analysis by filtering news articles and economic reports that mentioned the keywords "COVID-19," "pandemic," "CoV-2," "coronavirus" and "corona." The authors coded the airlines' response actions along the two-axis matrix (time and magnitude) and generated insights in a timely manner. Findings Major airlines have modified decision-making in relation to the exponential spread of the virus, which is in direct proportion to the deterioration level in the airline industry. When the impact was low in the early stage, major airlines maintained their status quo. Before long, the magnitude of the destruction became high, which made airlines implement capacity adjustments and request government relief measures. As industrial deterioration deepens, airlines keep calling for state aid packages and have changed their focus to the cargo transportation of high-demand commodities and pharmaceutical supplies. Lastly, industrial adversity and uncertainty have made them defer aggressive takeover opportunities. Originality/value Several researchers have investigated the impacts of the COVID-19 on the airline industry. However, there remains a dearth of scholarship on the hampered business activities and crisis management of the airline industry. In the absence of sufficient response strategies against the COVID-19 panic, this paper is to provide a comprehensive understanding of the major airlines' response strategies to the COVID-19 pandemic. In addition, this paper yields an opportunity for on-site management to review how major global airlines have responded to the crisis and find managerial insights to restore their business sustainability.