The big three EU Low Cost Carriers before and during the Covid-19 pandemic: Network overlaps and airfare effects

This study uses a large dataset to consider the network change of the three largest European Low Cost Carriers (LCCs) easyJet, Ryanair and Wizz Air during the pre-Covid-19 period and the Covid-19 pandemic period. Network changes are characterized in terms of airport pairs, city pairs, numbers of flights and network overlaps. The results show that European LCCs increasingly expanded their networks into markets that had already been served by incumbent LCCs, which indicates that LCCs increasingly compete head-to-head among themselves. Difference-in-differences regressions estimate that network overlaps among these LCCs lead to airfare reductions of approximately six Euros, ten percent.

Post pandemic aviation market recovery: Experience and lessons from China

China was the first aviation market in the world hit hard by COVID-19 and has been recovering gradually as the pandemic became largely under control within mainland China. This study reviews the recovery pattern influenced by the Chinese government's aviation policy choices, in the hope that our discussions and findings will help improve aviation policy responses elsewhere. While the domestic market in mainland China has enjoyed a quick recovery to about 80% of the pre-crisis level by July 2020, the recovery of international services has been much slower, due to the bilateral route and flight frequency/capacity control and strict requirements for health check and quarantine. China's domestic aviation market was recovered by about 80% in two months after the pandemic became under good control. Most other countries with a “curve flattening” strategy, instead of full pandemic control, may not expect the fast recovery path China has achieved. A British “travel corridor” approach may be more practical for Western countries to follow, albeit more likely to be subject to serious setbacks and disruptions. The aviation fee reductions and cost support China and many other countries have been using are helpful by reducing airlines' marginal costs, but not sufficient for carriers to return to profitability or sustainable operations. Capital injection and/or credit guarantee may be needed for many airlines to survive. With various, often uncoordinated, regulations imposed in international markets, airlines based in open economies that have small domestic markets will face particularly serious challenges during the recovery process. © 2020 Elsevier Ltd