The impact of the COVID-19 crisis on the US airline market: Are current business models equipped for upcoming changes in the air transport sector?

ABSTRACT

We address the impact of the COVID-19 crisis on the US airlines market and discuss the benefits and limitations of current business models in a context of increasing socio-economic uncertainty and stringent environmental regulations. Drawing our data from the Bureau of Transportation Statistics and 10-K/A reports, we undertook an exploratory study of the performance of the 10 main passenger airlines in their domestic operation during one year. We found that, although major losses occurred industry-wide, ultra-low-cost and low-cost airlines fared better than full-service network carriers did in terms of financial performance. We argue, nevertheless, that such apparently successful business models are not necessarily adaptive to address future industry changes.