Exploring the effect of COVID-19 on airline environmental efficiency through an interval epsilon-based measure model.

ABSTRACT

COVID-19 has dealt an unprecedented blow to the aviation industry since 2020. This paper applies the interval epsilon-based measure (IEBM) model to evaluate the optimal quarterly environmental efficiency of 14 global airlines of passenger and cargo subsystems during 2018-2020. Then, the time series prediction method is applied to forecast the interval data of inputs and outputs from 2021 to 2022. Finally, we can calculate the quarterly efficiency. Thus, the future development trends of airlines can be predicted. The results show that (1) COVID-19 has hit the passenger subsystem harder, while the freight subsystem has become more efficient; (2) the efficiency of the freight subsystem has inevitably declined in the post-epidemic era; and (3) therefore, the airlines will have a "√" shaped recovery curve in the next few years.