SITUATION OF EUROPEAN AIRLINES CAUSED BY COVID-19: RESTRICTIONS, GOVERNMENT SUBSIDIES AND FUTURE PROSPECTS

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.

Significant variables currently influencing air travelers’ preference for domestic airlines in Nigeria

In recent years domestic airlines are improving their services, and the major airlines in Nigeria are ahead of others based on superior strategies; in fact, some airlines are not fully utilized, which affects their profitability, while others are highly utilized. Market dynamics and regulatory forces are the key variables that influence airline attributes, features, and developments, but this is most evident where each airline competes for passengers despite the different route choices and airports of departure. This study aimed to examine the significant variables that are currently influencing air travelers’ preference for domestic airlines in Nigeria. Primary data were obtained through systematic and random sampling of air passengers, and a questionnaire was employed for data analysis. In Lagos and Abuja airports, 757 and 682 questionnaires were administered respectively with 71.1% and 61.9% returned respectively. Regression analysis was utilized to analyze the primary data. The study found that time, safety, and fare are the most influencing factors determining passenger choice of domestic airlines in Nigeria. The current findings are crucial for policymaking, particularly during the phase of airline planning and management especially during the Covid-19 pandemic era that has challenged the economic buoyancy and the purchasing power of passengers.

IFRS 16 - Impact on the Assets of the Major Airlines Operating in Brazil

The article aims to study the impacts that the adoption of IFRS 16 will have on the financial position, that is, what will be the impact on the total value of assets of airlines operating in the Brazilian market. It is evident that the new accounting of aircraft acquired through operating leases, an essential tool for any company in the sector, is fully in line with the essence of the operation. Therefore, the authors structured the methodology through a comparison of indicators between 3 companies in the Brazilian airline industry, together with data collection through accounting information obtained in explanatory notes on future payments of operating leases. The findings show that, with IFRS 16, there were significant changes in the indebtedness indicators of companies, due to the significant changes in the accounting of assets, affecting the capital structure and profitability of companies.

Business models for tourism and airlines will change

Significance The initial answers will come from the leisure segment, which is set to recover faster than business travel. For major airlines, reliance on business customers and travel hubs are potential vulnerabilities. Impacts COVID-19 has sparked interest in domestic tourism, but many places, especially the Mediterranean, still rely on good accessibility by air. Different providers will offer more simplicity as well as boutique experiences; both will be attractive to different clienteles. Addressing environmental concerns does not necessarily mean leisure air travel must suffer; sustainable smart solutions can be developed.

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

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.

New Distribution Capability (NDC) and its Effects on Travel Industry in Oman

Purpose of study The objectives of the study were to analyze the effects of transformation from GDS to NDC from the perspectives of the travel agencies in Oman; to find out the concerns of the travel agencies in Oman with regards to the implementation of NDC and to compare the benefits of NDC content with GDS from the perspectives of the travel agencies in Oman. Design/Methodology/Approach A questionnaire survey, telephone, and personal interview were conducted with 19 top leading travel agencies in Muscat region, Oman. Each Travel agent manager was given the questionnaire through google forms for the questionnaire. The telephone/ personal interview was also conducted. Around 78 employees were targeted out of which only 13 responded. The data collected was analyzed using Statistical package. Findings The findings support the fact that Oman being a small market with many small and medium players’ implementations of NDC is slow. The current pandemic has slowed it down even further. But their help being offered in terms of training and awareness by the NDC platform and some major airlines to speed up the adaptation. The study showed that the high cost of technological implementation is going to be one of the major barriers to complete switch to NDC system. As of now, the travel agents will be settling for GDS with NDC. Research Implications The adaptation by NDS has been slow especially by airlines. With IATA pushing the implementation, major airlines are slowly but surely adapting it as they can see the benefits they can derive. The customers too are benefiting from direct buying. The travel agencies in Oman especially small and medium-sized travel agencies are the ones who are most affected and there is not enough research being done to find what is it that is stopping them from adapting. Social Implications The pandemic has devastated the travel industry overall. Many small and medium businesses have been forced to shut due to lockdowns. Further, more people becoming comfortable with online shopping and willing to spend less, it will be a while before travel agents can start earning the same level of revenue they were enjoying before the pandemic. This will have an impact on unemployment as well as the inability to meet loan commitments. This can have a ripple effect. Originality/Novelty Few academic research has been carried out on NDC, especially in the Middle East. This research is the first of its kind which is dedicated to travel agents from Oman. The fact that NDC is set to revolutionize the shopping experience for the consumer one cannot ignore the fact that it is set to blow a dent in the revenues of the Travel agents.

RIVALRY AMONGST TOP-FIVE MAJOR AIRLINES IN THE U.S. MARKET

Understanding the economic characteristics of the U.S. airline industry, assessing the degree of competition/rivalry among the competing airline businesses in the U.S. airline industry, and (3) making recommendations to the airlines and to the consumers of air transportation are the primary objectives of this research study. The authors analyze the rivalry among major U.S. airlines operating in the domestic market using datasets extracted from Bureau of Transportation Statistics for operations during a 12-month period ending in May 2019. Amongst the 17 major U.S. airlines, whose annual operational revenue is over $1 billion, a set of top-five airlines has been identified using the percentage of their marketshare. The research findings indicate that these five major airlines have an intense rivalry in the U.S. domestic market in terms of number of markets served, number of departures made, number of passengers transported, amount of cargo carried, load factor, revenue and cost of operations, profit and loss, and net income earned. Hence, these airlines put pressure on one another and limit each other’s profit potential.

DEVELOPMENT OF STRATEGIC PLAN FOR ACMI COMPANIES IN AVIATION INDUSTRY

Aviation industry showing significant growth around the World. Different specialization companies making partnerships with each other to make aviation imperia even bigger and more stable. The relation between companies provides not only growth but also stagnation of operations. Nowadays Boeing 737-MAX crashes prove that affected major companies were forced to stop operations, due to lack of aircraft. For that reason, ACMI (Aircraft, crew, maintenance, and insurance) companies provided the full capacity to maintain flight operations. From this perspective, ACMI companies living a golden age. These companies’ services are booked by major airlines for many months in front, due to unforeseen aircraft type grounding issues. The situation in almost every industry varies between ups and downs by forcing companies to analyze the future strategy development plan. Based on AHP (Analytic Hierarchy Process) and TOPSIS method, it is preferable to buy neither to lease an ACMI services from a longer period perspective. New aircraft are less cheap regarding maintenance schedules, fuel consumption and after full repayment, it becomes airline property. The purpose of the article is to asses ACMI company strategy development to stay in the aviation business after major airlines re-establish their full operations. The leasing company can not be a direct competitor to airlines, therefore it needs to develop specific services, which can attract customers. ACMI company can provide services as fast as possible in unexpected or emergency situations. Moreover giving the flexibility of leasing and providing extra services, makes the company be attractive and unique.