Evaluating Financial Distress of Airlines: Pre and Post COVID-19 Pandemic



#KLLC 2024
#Industry 4.0


Over the past 5 years, the world has faced the outbreak of the COVID-19 pandemic, which caused the disruption of economies and industries around the world, including the airline industry. When there was no flight, airlines had not earned their passenger revenues. At the same time, expenses remain the same or may even increase. This paper analyzes which airlines are likely to face financial crisis through a financial distress model based on the selected airlines in Southeast Asia and East Asia that issued public financial statements over the past five years (2018 – 2022).


Before the COVID-19 outbreak, the airline industry in January 2020 grew slowly by 2.4% year-on-year of revenue passenger kilometers (RPK) compared to 4.6% in December 2019. It was the slowest growth rate since April 2010 due to the restrictions of the airspace in Europe because of volcanic ash clouds (IATA, 2020). The massive volcanic ash dispersed rapidly in the continent. Iceland declared a state of emergency and European airspace was closed. The shutdown left millions of passengers stranded not just in Europe but around the world. With most of Europe's airspace closed to air traffic, many other countries were affected as flights arrival and departure across Europe were canceled (Finlay, 2021).
Since the COVID-19 pandemic, there has been a change in passenger behavior. Many passenger flights were suspended due to the city and country lockdown, which has caused a significant decline in aircraft utilization (OECD, 2020). According to IATA (2020), the revenue passenger kilometers (RPK) dropped by more than 94% year-on-year in April of 2020 and further decreased to 75% in August 2020. In addition, economic downturn and trade activities affect the air cargo transportation with a decrease of nearly 30% year-on-year in April 2020, and further decline by 12% in August 2020.

Project Members

รัตนา สิริพุทธวณิชย์


วราลี รัตนกิจสุนทร
Waralee Rattanakijsuntorn



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