The art of airline cessation: A comprehensive analysis based on airline ceases reported between the years 2010 and 2023

Abstract

Understanding the multifaceted dynamics of airline cessation is essential for industry stakeholders and policymakers, particularly after the difficult period faced during the COVID-19 pandemic. During the peak of the pandemic, various outlets already called doomsday for aviation, anticipating a never-before-seen airline extinction, and asking for governmental subsidies as well as other supports. Given that the global air transportation system has largely recovered from the pandemic impact, it seems adequate to look back. This paper presents a longitudinal analysis of airline cessation between the years 2010 and 2023, aimed at delineating the evolving patterns and underlying determinants of airline cease events. Leveraging a comprehensive dataset encompassing more than 200 global airline closures, we discuss the potential drivers behind these cessation events. We find that nearly half of the airlines ceased due to unmanageable financial distress, followed by merger/restructuring efforts. In addition, we find that the COVID-19 pandemic has not induced extraordinary airline extinction, contrary to fears articulated during the peak of the pandemic. While our analysis is mainly qualitative, based on aggregated statistics and highlighted examples, we hope to inspire future work that explores deeper into this important subject through quantitative analysis, fostering a more comprehensive understanding of the aviation industry’s vulnerabilities and guiding the development of successful strategies for crisis prevention and management.