U.S. network and low-cost carriers' performance in response to COVID-19: Strictness of government policies and passengers' panic

Sepideh Kaffash; Dariush Khezrimotlagh

doi:10.1016/j.rtbm.2022.100835

U.S. network and low-cost carriers' performance in response to COVID-19: Strictness of government policies and passengers' panic

Res Transp Bus Manag. 2023 Jan:46:100835. doi: 10.1016/j.rtbm.2022.100835. Epub 2022 May 17.

Authors

Sepideh Kaffash¹, Dariush Khezrimotlagh²

Affiliations

¹ Department of Information Systems and Operations Management, Suffolk University, 8 Ashburton Pl, Boston, MA 02108, USA.
² Department of Mathematics and Computer Science, Pennsylvania State University, 777 West Harrisburg Pike, Middletown, PA 17057, USA.

Abstract

Coronavirus outbreak has been highly disruptive for aviation sector. There is strong correlation between COVID-19 related news, volatility in transportation, low confidence in travel safety, and uncertainty in this era. In this research, we study and distinguish the COVID-19's impact on U.S. airlines' performance. The network and low-cost carriers responded differently to it in terms of capacity reduction, market share reduction, scheduled flights reduction, flight cancellations, and service quality in the year 2020. We illustrate low-cost carrier had higher efficiency compared to network ones during pandemic by applying Network Data Envelopment Analysis. Furthermore, the effects of two key factors that emerge from COVID-19, the government's stringency actions and passengers' panic, on U.S. airlines efficiency are studied. Our analysis demonstrate that the negative effect is more significant for passengers' panic than it is for governments' stringency measures. In addition, we show that passengers' panic has more impact on the efficiency of network carriers compared to low-cost carrier.

Keywords: COVID-19; Government stringency actions; Network DEA; Passengers' panic; US airlines.