The Impact of Vaccination, Infection and Fatality Rate on ASEAN Air Transport Industry in the Pandemic Period

Abstract

This study aims to determine the impact of COVID-19 on air connectivity in the Association of Southeast Asian Nations (ASEAN) region, specifically focusing on infection, vaccination and fatality rates. To examine the impact of COVID-19 on the ASEAN air transport industry, a panel data series was created. The panel covered data from 57 airlines with different business models in the 10 ASEAN member states from January 2019 to July 2022 (31 months). The results of the study have shown that there is a significant inverse linear relationship between full-service and low-cost international flight movements, passenger demand and vaccination rate, infection rate and fatality rate. At the country level, Brunei experienced the lowest drop in air passenger demand, followed by the Philippines, Thailand, Malaysia and Cambodia. Other countries (Indonesia, Lao PDR, Myanmar, Singapore and Vietnam) were not significant predictors of passenger demand. The study’s results have indicated that an increase in infection rate has a greater impact on the international air travel market compared to the domestic market. The reduction rate of the domestic market is only half that of the international market, while the fatality rate demonstrated no differences. This study represents a valuable contribution to the existing knowledge of the pandemic’s impact on the air transport industry, focusing on Southeast Asian countries. It provides evidence to help stakeholders in the aviation industry prepare for future related crises. The study concludes that fostering greater cooperation and coordination among ASEAN member states in managing health crises and facilitating the aviation industry can promote economic growth, enhance resilience and strengthen regional integration in the long run. JEL Classification: F02, I30