IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v118y2022icp10-19.html
   My bibliography  Save this article

STARTUPS: Founding airlines during COVID-19 - A hopeless endeavor or an ample opportunity for a better aviation system?

Author

Listed:
  • Sun, Xiaoqian
  • Wandelt, Sebastian
  • Zhang, Anming

Abstract

The devastating impact of COVID-19 on aviation is unprecedented and undoubted in the recent sci-entific literature, with many studies having dissected different facets of COVID-19-induced changes to the industry. A few studies have stepped further and highlighted that the COVID-19 pandemic could have positive long-term impacts on aviation. Given that traditional air carriers are known to be reluctant for performing high-risk experiments outside their business-as-usual, parts of hope for a better aviation future rests on novel players entering the industry. The pandemic - against common perception and odds - might have created a rare opportunity for airline startups to enter the market. In this study, we first dissect the impact of the COVID-19 pandemic on aviation and how it possibly created a breeding ground for new airlines. We propose a framework of eight facets, STARTUPS, covering flight Suspensions, Talents, Aircraft, Recovery, Travel demand, Uniquity, Policy making, and Strategy. Moreover, we analyze the business model and markets of 46 airline startups, established or becoming active during the pandemic. Our study is concluded with a dis-cussion on the risk factors for airline startups during the COVID-19 pandemic and induced policy challenges. Our analysis, we believe, is complementary to existing studies on COVID-19, leveraging a novel perspective on the pandemic and the aviation industry.

Suggested Citation

  • Sun, Xiaoqian & Wandelt, Sebastian & Zhang, Anming, 2022. "STARTUPS: Founding airlines during COVID-19 - A hopeless endeavor or an ample opportunity for a better aviation system?," Transport Policy, Elsevier, vol. 118(C), pages 10-19.
  • Handle: RePEc:eee:trapol:v:118:y:2022:i:c:p:10-19
    DOI: 10.1016/j.tranpol.2022.01.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X22000191
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.tranpol.2022.01.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kuo, Chung-Wei & Jou, Rong-Chang, 2017. "Willingness to pay for airlines’ premium economy class: The perspective of passengers," Journal of Air Transport Management, Elsevier, vol. 59(C), pages 134-142.
    2. Amankwah-Amoah, Joseph, 2020. "Stepping Up and Stepping Out of COVID-19: New Challenges for Environmental Sustainability Policies in the Global Airline Industry," MPRA Paper 101491, University Library of Munich, Germany.
    3. Zuidberg, Joost & de Wit, Jaap G., 2020. "The development of long-haul low-cost networks in the North Atlantic airline market: An exploratory data approach," Transport Policy, Elsevier, vol. 95(C), pages 103-113.
    4. Serrano, Francisco & Kazda, Antonín, 2020. "The future of airports post COVID-19," Journal of Air Transport Management, Elsevier, vol. 89(C).
    5. Linden, Erik, 2021. "Pandemics and environmental shocks: What aviation managers should learn from COVID-19 for long-term planning," Journal of Air Transport Management, Elsevier, vol. 90(C).
    6. Brueckner, Jan K. & Zhang, Anming, 2010. "Airline emission charges: Effects on airfares, service quality, and aircraft design," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 960-971, September.
    7. Marco Alderighi & Alessandro Cento & Peter Nijkamp & Piet Rietveld, 2007. "Assessment of New Hub‐and‐Spoke and Point‐to‐Point Airline Network Configurations," Transport Reviews, Taylor & Francis Journals, vol. 27(5), pages 529-549, February.
    8. Harvey, Geraint. & Turnbull, Peter, 2009. "The impact of the financial crisis on labour in the civil aviation industry : final report," ILO Working Papers 994476973402676, International Labour Organization.
    9. Stefano Maria Iacus & Fabrizio Natale & Carlos Satamaria & Spyridon Spyratos & Michele Vespe, 2020. "Estimating and Projecting Air Passenger Traffic during the COVID-19 Coronavirus Outbreak and its Socio-Economic Impact," Papers 2004.08460, arXiv.org, revised Apr 2020.
    10. Pereira, Deivison da Silveira & Soares de Mello, João Carlos C.B., 2021. "Efficiency evaluation of Brazilian airlines operations considering the Covid-19 outbreak," Journal of Air Transport Management, Elsevier, vol. 91(C).
    11. de Wit, Jaap G. & Zuidberg, Joost, 2012. "The growth limits of the low cost carrier model," Journal of Air Transport Management, Elsevier, vol. 21(C), pages 17-23.
    12. Michal Klenka, 2019. "Major incidents that shaped aviation security," Journal of Transportation Security, Springer, vol. 12(1), pages 39-56, June.
    13. Mario Mazzocchi & Francesca Hansstein & Maddalena Ragona, 2010. "The 2010 Volcanic Ash Cloud and Its Financial Impact on the European Airline Industry," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(02), pages 92-100, July.
    14. Sun, Xiaoqian & Wandelt, Sebastian & Zheng, Changhong & Zhang, Anming, 2021. "COVID-19 pandemic and air transportation: Successfully navigating the paper hurricane," Journal of Air Transport Management, Elsevier, vol. 94(C).
    15. Ferràs-Hernández, Xavier & Tarrats-Pons, Elisenda & Arimany-Serrat, Núria, 2017. "Disruption in the automotive industry: A Cambrian moment," Business Horizons, Elsevier, vol. 60(6), pages 855-863.
    16. Santos, Luca J. & Oliveira, Alessandro V.M. & Aldrighi, Dante Mendes, 2021. "Testing the differentiated impact of the COVID-19 pandemic on air travel demand considering social inclusion," Journal of Air Transport Management, Elsevier, vol. 94(C).
    17. Abate, Megersa & Christidis, Panayotis & Purwanto, Alloysius Joko, 2020. "Government support to airlines in the aftermath of the COVID-19 pandemic," Journal of Air Transport Management, Elsevier, vol. 89(C).
    18. Zhang, Yahua & Zhang, Anming & Wang, Jiaoe, 2020. "Exploring the roles of high-speed train, air and coach services in the spread of COVID-19 in China," Transport Policy, Elsevier, vol. 94(C), pages 34-42.
    19. Fangni Zhang & Daniel J. Graham, 2020. "Air transport and economic growth: a review of the impact mechanism and causal relationships," Transport Reviews, Taylor & Francis Journals, vol. 40(4), pages 506-528, July.
    20. Morrell, Peter, 2008. "Can long-haul low-cost airlines be successful?," Research in Transportation Economics, Elsevier, vol. 24(1), pages 61-67.
    21. Albers, Sascha & Rundshagen, Volker, 2020. "European airlines′ strategic responses to the COVID-19 pandemic (January-May, 2020)," Journal of Air Transport Management, Elsevier, vol. 87(C).
    22. Ryley, Tim & Baumeister, Stefan & Coulter, Liese, 2020. "Climate change influences on aviation: A literature review," Transport Policy, Elsevier, vol. 92(C), pages 55-64.
    23. Leach, Melissa & MacGregor, Hayley & Scoones, Ian & Wilkinson, Annie, 2021. "Post-pandemic transformations: How and why COVID-19 requires us to rethink development," World Development, Elsevier, vol. 138(C).
    24. Gudmundsson, S.V. & Cattaneo, M. & Redondi, R., 2021. "Forecasting temporal world recovery in air transport markets in the presence of large economic shocks: The case of COVID-19," Journal of Air Transport Management, Elsevier, vol. 91(C).
    25. Sun, Xiaoqian & Wandelt, Sebastian & Zhang, Anming, 2021. "Vaccination passports: Challenges for a future of air transportation," Transport Policy, Elsevier, vol. 110(C), pages 394-401.
    26. Thombre, Anurag & Agarwal, Amit, 2021. "A paradigm shift in urban mobility: Policy insights from travel before and after COVID-19 to seize the opportunity," Transport Policy, Elsevier, vol. 110(C), pages 335-353.
    27. Scott Blunk & David Clark & James McGibany, 2006. "Evaluating the long-run impacts of the 9/11 terrorist attacks on US domestic airline travel," Applied Economics, Taylor & Francis Journals, vol. 38(4), pages 363-370.
    28. Bachwich, Alexander R. & Wittman, Michael D., 2017. "The emergence and effects of the ultra-low cost carrier (ULCC) business model in the U.S. airline industry," Journal of Air Transport Management, Elsevier, vol. 62(C), pages 155-164.
    29. Sun, Xiaoqian & Wandelt, Sebastian & Zhang, Anming, 2021. "On the degree of synchronization between air transport connectivity and COVID-19 cases at worldwide level," Transport Policy, Elsevier, vol. 105(C), pages 115-123.
    30. Czerny, Achim I. & Fu, Xiaowen & Lei, Zheng & Oum, Tae H., 2021. "Post pandemic aviation market recovery: Experience and lessons from China," Journal of Air Transport Management, Elsevier, vol. 90(C).
    31. Dube, Kaitano & Nhamo, Godwell & Chikodzi, David, 2021. "COVID-19 pandemic and prospects for recovery of the global aviation industry," Journal of Air Transport Management, Elsevier, vol. 92(C).
    32. Franke, Markus, 2007. "Innovation: The winning formula to regain profitability in aviation?," Journal of Air Transport Management, Elsevier, vol. 13(1), pages 23-30.
    33. Adrienne, Nena & Budd, Lucy & Ison, Stephen, 2020. "Grounded aircraft: An airfield operations perspective of the challenges of resuming flights post COVID," Journal of Air Transport Management, Elsevier, vol. 89(C).
    34. Daft, Jost & Albers, Sascha, 2012. "A profitability analysis of low-cost long-haul flight operations," Journal of Air Transport Management, Elsevier, vol. 19(C), pages 49-54.
    35. repec:ilo:ilowps:447697 is not listed on IDEAS
    36. Bauer, Linus Benjamin & Bloch, Daniel & Merkert, Rico, 2020. "Ultra Long-Haul: An emerging business model accelerated by COVID-19," Journal of Air Transport Management, Elsevier, vol. 89(C).
    37. Ferrer-Rosell, Berta & Coenders, GermÃ, 2017. "Airline type and tourist expenditure: Are full service and low cost carriers converging or diverging?," Journal of Air Transport Management, Elsevier, vol. 63(C), pages 119-125.
    38. Stefan Gössling & Chris Lyle, 2021. "Transition policies for climatically sustainable aviation," Transport Reviews, Taylor & Francis Journals, vol. 41(5), pages 643-658, September.
    39. Macilree, John & Duval, David Timothy, 2020. "Aeropolitics in a post-COVID-19 world," Journal of Air Transport Management, Elsevier, vol. 88(C).
    40. Tisdall, Lucas & Zhang, Yahua & Zhang, Anming, 2021. "COVID-19 impacts on general aviation – Comparative experiences, governmental responses and policy imperatives," Transport Policy, Elsevier, vol. 110(C), pages 273-280.
    41. Fu, Xiaowen & Jin, Huan & Liu, Shaoxuan & Oum, Tae H. & Yan, Jia, 2019. "Exploring network effects of point-to-point networks: An investigation of the spatial patterns of Southwest Airlines’ network," Transport Policy, Elsevier, vol. 76(C), pages 36-45.
    42. Sun, Xiaoqian & Wandelt, Sebastian & Zhang, Anming, 2021. "Technological and educational challenges towards pandemic-resilient aviation," Transport Policy, Elsevier, vol. 114(C), pages 104-115.
    43. Luigi Serio & Piero Tedeschi & Giovanni Ursino, 2018. "Making Sense of (Ultra) Low-Cost Flights Vertical Differentiation in Two-Sided Markets," Management Science, INFORMS, vol. 64(1), pages 401-420, January.
    44. Lamb, Tracy L. & Winter, Scott R. & Rice, Stephen & Ruskin, Keith J. & Vaughn, Austin, 2020. "Factors that predict passengers willingness to fly during and after the COVID-19 pandemic," Journal of Air Transport Management, Elsevier, vol. 89(C).
    45. Suau-Sanchez, Pere & Voltes-Dorta, Augusto & Cugueró-Escofet, Natàlia, 2020. "An early assessment of the impact of COVID-19 on air transport: Just another crisis or the end of aviation as we know it?," Journal of Transport Geography, Elsevier, vol. 86(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sun, Xiaoqian & Wandelt, Sebastian & Zhang, Anming, 2023. "A data-driven analysis of the aviation recovery from the COVID-19 pandemic," Journal of Air Transport Management, Elsevier, vol. 109(C).
    2. Sun, Xiaoqian & Wandelt, Sebastian & Zhang, Anming, 2022. "Ghostbusters: Hunting abnormal flights in Europe during COVID-19," Transport Policy, Elsevier, vol. 127(C), pages 203-217.
    3. Sugishita, Kashin & Mizutani, Hiroki & Hanaoka, Shinya, 2024. "Disruption and recovery of the US domestic airline networks during the COVID-19 pandemic," Journal of Air Transport Management, Elsevier, vol. 114(C).
    4. Singh, Manjinder & Bansal, Prateek & Raj, Alok & Dixit, Aasheesh, 2023. "Eliciting preferences of Indians for air travel during COVID-19 pandemic," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sun, Xiaoqian & Wandelt, Sebastian & Zheng, Changhong & Zhang, Anming, 2021. "COVID-19 pandemic and air transportation: Successfully navigating the paper hurricane," Journal of Air Transport Management, Elsevier, vol. 94(C).
    2. Chen, Yuting & Fuellhart, Kurt & Grubesic, Tony H. & Zhang, Shengrun & Witlox, Frank, 2024. "An analysis of the context factors influencing the diverse response of airports to COVID-19 using panel and group regression," Transportation Research Part A: Policy and Practice, Elsevier, vol. 179(C).
    3. Su, Junbiao & Wu, Hanjun & Tsui, Kan Wai Hong & Fu, Xiaowen & Lei, Zheng, 2023. "Aviation resilience during the COVID-19 pandemic: A case study of the European aviation market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 177(C).
    4. Sun, Xiaoqian & Wandelt, Sebastian & Zhang, Anming, 2021. "Technological and educational challenges towards pandemic-resilient aviation," Transport Policy, Elsevier, vol. 114(C), pages 104-115.
    5. Kim, Myeonghyeon & Sohn, Jeongwoong, 2022. "Passenger, airline, and policy responses to the COVID-19 crisis: The case of South Korea," Journal of Air Transport Management, Elsevier, vol. 98(C).
    6. Mutascu, Mihai & Sokic, Alexandre, 2023. "Air transportation under COVID-19 pandemic restrictions: A wavelet analysis," Transport Policy, Elsevier, vol. 139(C), pages 155-181.
    7. Gualini, Andrea & Zou, Li & Dresner, Martin, 2023. "Airline strategies during the pandemic: What worked?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 170(C).
    8. Budd, Thomas & Suau-Sanchez, Pere & Halpern, Nigel & Mwesiumo, Deodat & Bråthen, Svein, 2021. "An assessment of air passenger confidence a year into the COVID-19 crisis: A segmentation analysis of passengers in Norway," Journal of Transport Geography, Elsevier, vol. 96(C).
    9. Yiu, Cho Yin & Ng, Kam K.H. & Yu, Simon C.M. & Yu, Chun Wah, 2022. "Sustaining aviation workforce after the pandemic: Evidence from Hong Kong aviation students toward skills, specialised training, and career prospects through a mixed-method approach," Transport Policy, Elsevier, vol. 128(C), pages 179-192.
    10. Su, Min & Hu, Baoyang & Luan, Weixin & Tian, Chuang, 2022. "Effects of COVID-19 on China's civil aviation passenger transport market," Research in Transportation Economics, Elsevier, vol. 96(C).
    11. Xue, Dabin & Liu, Zhizhao & Wang, Bing & Yang, Jian, 2021. "Impacts of COVID-19 on aircraft usage and fuel consumption: A case study on four Chinese international airports," Journal of Air Transport Management, Elsevier, vol. 95(C).
    12. Warnock-Smith, David & Graham, Anne & O'Connell, John F. & Efthymiou, Marina, 2021. "Impact of COVID-19 on air transport passenger markets: Examining evidence from the Chinese market," Journal of Air Transport Management, Elsevier, vol. 94(C).
    13. Cui, Qiang & Hu, Yu-xin & Yu, Li-ting, 2022. "Can the aviation industry achieve carbon emission reduction and revenue growth simultaneously under the CNG2020 strategy? An empirical study with 25 benchmarking airlines," Energy, Elsevier, vol. 245(C).
    14. Sugishita, Kashin & Mizutani, Hiroki & Hanaoka, Shinya, 2024. "Disruption and recovery of the US domestic airline networks during the COVID-19 pandemic," Journal of Air Transport Management, Elsevier, vol. 114(C).
    15. Chen, Yuting & Fuellhart, Kurt & Grubesic, Tony H. & Zhang, Shengrun & Witlox, Frank, 2023. "Diverging spatiotemporal responses to COVID-19Â by airports: Evidence from China," Journal of Air Transport Management, Elsevier, vol. 113(C).
    16. Hiney, Noel & Efthymiou, Marina & Morgenroth, Edgar, 2023. "Impact of Covid-19 on Irish airport stakeholder relationships," Annals of Tourism Research, Elsevier, vol. 102(C).
    17. Hanson, Daniel & Toru Delibasi, Tuba & Gatti, Matteo & Cohen, Shamai, 2022. "How do changes in economic activity affect air passenger traffic? The use of state-dependent income elasticities to improve aviation forecasts," Journal of Air Transport Management, Elsevier, vol. 98(C).
    18. Kuo, Pei-Fen & Brawiswa Putra, I Gede & Setiawan, Faizal Azmi & Wen, Tzai-Hung & Chiu, Chui-Sheng & Sulistyah, Umroh Dian, 2022. "The impact of the COVID-19 pandemic on O-D flow and airport networks in the origin country and in Northeast Asia," Journal of Air Transport Management, Elsevier, vol. 100(C).
    19. Liao, Maozhu & Wu, Chuntao & Yan, Hongmeng, 2022. "Recovery of Chinese low-cost carriers after the outbreak of COVID-19 pandemic," Journal of Air Transport Management, Elsevier, vol. 105(C).
    20. Morlotti, Chiara & Redondi, Renato, 2023. "The impact of COVID-19 on airlines’ price curves," Journal of Air Transport Management, Elsevier, vol. 107(C).

    More about this item

    Keywords

    COVID-19; Airline; Startups;
    All these keywords.

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:118:y:2022:i:c:p:10-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.