Impact of COVID-19 on different business models of European airlines

Figures & data

Table 1. Sample characteristics by main financial indicators.

Company	Cash/assets ratio overall average, 2019	Market index
Aegean	0.4	ATHEX COMPOSITE
Aeroflot	0.04	MOEX RUSSIA INDEX
Air France-KLM	0.15	FRANCE CAC 40
easyJet	0.2	FTSE ALL SHARE
Finnair	0.25	OMX HELSINKI (OMXH)
International Airlines Group	0.22	FTSE ALL SHARE
Lufthansa	0.08	DAX
Norwegian Air Shuttle	0.04	OSLO ex
Ryanair	0.26	EURO STOXX
SAS	0.21	OMX STOCKHOLM (OMXS)
Wizz Air	0.35	FTSE ALL SHARE

Note: Cash/assets ratio is calculated by dividing the amount of cash and short-term investments by the total assets based on the investing.com database.

Figure 1. Financial-based and business-based clusters. Note: LCC = Low Cost Carriers; FSC = Full Service Carriers; IAG = International Airlines Group; C/A = Cash per Assets ratio.

Figure 2. Time plane of analysis focusing on the main event day.

Figure 3. Time periods of the analysis focusing on the whole first wave and its periods.

Table 2. AR t-test statistics around the key date (24 February) for the total sample.

	AR t-statistics
Airlines	20/02/2020	21/02/2020	24/02/2020	25/02/2020	26/02/2020
Aegean	1.93	−1.25	−5.75***	0.52	−4.06***
Aeroflot	−1.09	0.10	n.d.	0.01	−1.31
Air France-KLM	−1.21	−1.23	−2.38*	−0.68	−0.39
easyJet	0.37	−0.09	−6.31***	−0.74	−0.46
Finnair	0.16	−0.62	−1.40	−1.18	−0.11
International Airlines Group	−0.71	−0.49	−3.19**	−0.22	0.54
Lufthansa	−0.99	−0.69	−2.76**	−0.27	−1.97*
Norwegian Air Shuttle	−0.14	−0.24	−2.19**	−3.07**	−2.96**
Ryanair	0.43	0.09	−5.09***	−0.34	−1.04
SAS	−0.12	−0.52	−2.05**	−0.16	−4.48***
Wizz Air	0.04	−0.31	−5.84***	−1.17	−1.23

Note: ***: p < 0.001; **: p < 0.01; *: p < 0.05. n.d.: No data was released for that day, only 02.21 was left in place.

Table 3. Cumulative average abnormal daily returns and standard deviations of total sample, and CAAR t-test statistics with critical values over the entire and three periods of the pandemic.

T1	T2	CAAR%	sCAAR%	tθ
03/01	20/03	−32.9	6.29	−5.23***
03/01	17/01	4.21	1.62	2.61*
20/01	21/02	−1.98	1.61	−1.23
24/02	20/03	−35.13	7.58	−4.63***

Note: ***: p < 0.001; **: p < 0.01; *: p < 0.05. T₁ and T₂ are the start and end dates of the full and three periods of the event window. CAAR% = Cumulated average abnormal return per group over different periods, as a percentage. S_CAAR% = Standard deviations of cumulative average abnormal returns over groups over different periods, as a percentage.

Figure 4. Evolution of total cumulative returns around the key-date (24 February) according to the financial-based clusters.

Table 4. Cumulated average abnormal returns of individual elements, averages of the sample with a cash/assets ratio above the median and standard deviations of these returns, and test statistics compared to the index of the average returns of airlines with a cash/assets ratio below the median, compared to time 0 on 24 February.

Sample	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
CA > median R^2=0.380	(0;0)	−3.43	0.01	−3.00**
	(0;2)	−6.29	0.04	−3.18**
	(0;5)	−5.22	0.08	−1.86
	(1;5)	−1.79	0.07	−0.70
	(−2;2)	−8.62	0.07	−3.37***
	(−5;−1)	−3.46	0.07	−1.35
	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
Wizz Air R^2=0.215	(0;0)	−7.10	0.02	−4.59***
	(0;2)	−7.51	0.07	−2.80**
	(0;5)	−12.12	0.14	−3.20**
	(1;5)	−5.02	0.12	−1.45
	(−2;2)	−7.03	0.12	−2.03*
	(−5;−1)	−0.76	0.12	−0.22
	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
Ryanair R^2=0.285	(0;0)	−7.42	0.03	−4.10***
	(0;2)	−5.36	0.10	−1.71
	(0;5)	−4.05	0.20	−0.91
	(1;5)	3.37	0.16	0.83
	(−2;2)	−4.36	0.16	−1.08
	(−5;−1)	−0.12	0.16	−0.03
	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
IAG R^2=0.229	(0;0)	−3.38	0.03	−1.84
	(0;2)	1.51	0.10	0.48
	(0;5)	−15.67	0.20	−3.48***
	(1;5)	−12.30	0.17	−2.99**
	(−2;2)	0.22	0.17	0.05
	(−5;−1)	−0.72	0.17	−0.18
	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
Aegean R^2=0.039	(0;0)	−10.29	0.02	−7.67***
	(0;2)	−13.39	0.05	−5.77***
	(0;5)	−21.54	0.11	−6.56***
	(1;5)	−11.25	0.09	−3.75***
	(−2;2)	−13.87	0.09	−4.63***
	(−5;−1)	−0.85	0.09	−0.28
	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
Finnair R^2=0.131	(0;0)	−1.37	0.04	−0.69
	(0;2)	−0.40	0.12	−0.12
	(0;5)	−6.95	0.24	−1.42
	(1;5)	−5.58	0.20	−1.25
	(−2;2)	−0.78	0.20	−0.18
	(−5;−1)	−4.31	0.20	−0.96

Note: Time 0 is 02.24, Monday. Critical values for t-test were 1.96 at 5%, 2.58 at 1%, and 3.3 at 0.1%. ***: p < 0.001; **: p < 0.01; *: p < 0.05.

Table 5. Cumulated average abnormal returns of individual elements, averages of the sample of LCCs and standard deviations of these returns, and test statistics compared to the index of average returns of FSCs, compared to time 0 on 24 February.

Sample	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
LCCs average R^2=0.327	(0;0)	−8.73	0.03	−5.32***
	(0;2)	−14.13	0.08	−4.98***
	(0;5)	−9.03	0.16	−2.25*
	(1;5)	−0.30	0.13	−0.08
	(−2;2)	−12.68	0.13	−3.46***
	(−5;−1)	0.14	0.13	0.04
	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
Wizz Air R^2=0.258	(0;0)	−7.31	0.02	−4.87***
	(0;2)	−8.36	0.07	−3.21**
	(0;5)	−7.57	0.14	−2.06*
	(1;5)	−0.25	0.11	−0.08
	(−2;2)	−7.48	0.11	−2.23*
	(−5;−1)	−0.13	0.11	−0.04
	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
Ryanair R^2=0.307	(0;0)	−8.10	0.03	−4.55***
	(0;2)	−7.27	0.09	−2.36*
	(0;5)	0.75	0.19	0.17
	(1;5)	8.85	0.16	2.23*
	(−2;2)	−5.85	0.16	−1.47
	(−5;−1)	0.58	0.16	0.15
	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
easyJet R^2=0.377	(0;0)	−10.03	0.04	−5.11***
	(0;2)	−7.32	0.12	−2.15*
	(0;5)	5.03	0.23	1.05
	(1;5)	15.06	0.19	3.43***
	(−2;2)	−4.18	0.19	−0.95
	(−5;−1)	4.04	0.19	0.92
	τ1, τ2	CAR (%)	Std. deviation (%)	T stat (CAR)
Norwegian Air Shuttle R^2=0.058	(0;0)	−9.51	0.21	−2.06*
	(0;2)	−33.69	0.64	−4.21***
	(0;5)	−34.62	1.28	−3.06**
	(1;5)	−25.10	1.07	−2.43*
	(−2;2)	−33.37	1.07	−3.23**
	(−5;−1)	−4.03	1.07	−0.39

Note: Time 0 is 02.24, Monday. Critical values for t-test 1.96 at 5%, 2.58 at 1%, 3.3 at 0.1%. ***: p < 0.001; **: p < 0.01; *: p < 0.05.

Figure 5. Evolution of total cumulative returns around the key-date (24 February) according to the business-based clusters.