Effect of the COVID-19 pandemic on airfare factors, and the air transportation and tourism industries: The case of the Philippines

Airline pricing considers various factors such as flight length, operators, and seat availability. As the airlines and passengers’ perspectives towards airline pricing has been evolving, other studies did not consider other aspects like time of the day as part of the airlines’ pricing strategy. Additionally, the global tourism industry, which has been consistently growing since 2010, had its momentum grinded to a halt due to the COVID-19 pandemic, which poses the question on how airfare pricing behaves during a health-related crisis, particularly during the current pandemic. Another gap is the evaluation of economic loss from a health-related disaster that lasted for a prolonged period. This study uses a combination of airfare movement analysis using fixed effects and/or random effects methods and estimating economic loss using the persistent inoperability input-output model through airfare data of selected Manila-based routes and the Philippine input-output table, respectively. Aspects such as advance purchasing and ticket cancellation are consistent with the existing literature, while day of the week purchase and certain fare bucket characteristics had mixed results. The economic impact the pandemic has had so far is significant with greater ripple effects on sectors that the air transportation and tourism industries rely on