European Airlines in Turmoil: Post-Pandemic Challenges and Recovery Efforts

Abstract

The COVID-19 pandemic has profoundly impacted various sectors, notably the aviation industry, where travel restrictions and reduced demand for flights led to significant challenges. This study examines the pandemic's financial implications on European companies during the period from 2018 to 2021, utilizing quantitative comparative analysis. The findings reveal a substantial decline in revenues for these companies, resulting in adverse effects on both their operational and net performance. Faced with the pandemic's uncertainty, these companies prioritized liquidity, resorting to external financing for support. Notably, the study highlights that TAP, the Portuguese airline, received significantly more state support compared to its European counterparts. Plus, TAP appears to encounter greater difficulties in servicing its financial debt, standing as the sole entity with an excessive debt burden among the analysed companies. This research contributes valuable insights into the aviation sector's challenges during the pandemic, encouraging a broader European-level dialogue on the subject.