Does fleet standardization matter on profitability and financial policy response of airlines during COVID-19 pandemics in the U.S?

Abstract

This study tries to find the contribution of the fleet standardization index of airline companies through the financial values of airlines in the COVID-19 pandemic crisis. One of the driving forces of this research is the stagnation in the aviation industry, along with the cessation of all international flights to prevent worse pandemic conditions. The main contribution of the study is clarifying the effect of fleet variety and its financial inferences about fleet standardization and crisis management relationship under inoperative service considerations. Data Envelopment Analysis (DEA) is used as a complementary method for standardization index calculations. According to the results, while the positive contribution of the fleet standardization index to operational revenues was observed, there was no sign of the effects of fleet standardization on the accounting performance of companies. Besides, fleet standardization enabled us to measure the response of Low-Cost Carrier (LCC) and Full-Service Carrier (FSC) airlines in crises. In this study, nine airline companies were selected from both trend representatives, and the results were presented for the U.S. It is found that fleet standardization is related to the adopted flight network type and profitability of each company directly. Results obtained revealed the relationship between fleet standardization and financial relations under inoperative conditions positively. In addition, inferences were made about the effects of the operational policies adopted by the companies.