Nonmarket Strategies of Airlines in a COVID-19 World and Beyond

Yusaf H. Akbar and Rusudan Kvantaliani

A chapter in Airlines and the COVID-19 Pandemic, 2024, vol. 11, pp 49-69 from Emerald Group Publishing Limited

Abstract: While the passenger airline sector has faced various crises over the past decades, including multiple oil price shocks, events like 9/11 and the ensuing “war on terror,” as well as outbreaks such as SARS and MERS, the COVID-19 pandemic, a once-in-a-century event had an unparalleled impact on both regional and global levels. The industry witnessed extensive disruptions to entire route networks for months, compelling airlines to implement substantial service cutbacks. Additionally, stringent public health measures such as lockdowns and travel bans mandated by governments worldwide severely limited airlines' ability to operate efficiently. To mitigate the financial strain caused by prolonged lockdowns, airlines sought unprecedented levels of financial relief from governments, including direct emergency subsidies and loans, to bolster their balance sheets. This chapter delves into the strategic decisions made by European airlines in bargaining and nonbargaining nonmarket strategy (compliance, avoidance, and so forth) with industry regulators as part of their comprehensive crisis management strategies. We analyze the specific actions taken by European airlines to protect their commercial interests and explore how the interplay between bargaining and nonbargaining approaches unfolded. Furthermore, we reflect on the insights gained from these experiences and consider how they may influence future regulatory strategies adopted by the airline industry. A key lesson of this period is the salience of aviation to the economies of Europe and the ability of the airlines to influence governments to offer significant levels of financial support to ensure the operating continuity of airlines.

Keywords: Nonmarket strategy; COVID-19; delegitimization cascade; bargaining; nonbargaining (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:aiaezz:s2212-160920240000011003

DOI: 10.1108/S2212-160920240000011003

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