Author(s)

Ruo Du, Linzhe Xu, Zhili Xu

Corresponding Author

Ruo Du

ABSTRACT

This paper uses PESTLE analysis to study the impact of six external factors on the aviation industry after the outbreak of the coronavirus disease (COVID-19) pandemic. United Airlines and Southwest Airlines are selected as industry representatives. United Airlines and Southwest Airlines are chosen because of their response to the pandemic and their different financial position during the period. Especially in the post-pandemic era, the government tends to support and regulate these airlines by enacting Acts to provide funding and subsidies. Airlines’ responses to the impact of COVID-19 are analyzed by observing changes in compensation settings for companies’ nominated executives during this period and compensation trends over the past three years. The analysis shows that airlines are doing their best to respond to the government and organizations to revitalize the industry and secure their interests. Facing increased costs, reduced passenger flow, and the risk of not being able to service their debt, compensation adjustments and incentives have become a relatively common way to cope with the financial crisis even though differences between airlines persist. With financial difficulties, airline companies have had to cut back on some of their technology spending, especially in relation to carbon emissions, but core programs have been retained to comply with the carbon policy. The financial support provided by the Acts greatly alleviates the pressure on companies to survive.

KEYWORDS

COVID-19, Aviation Industry, PESTLE analysis, Incentive Plan