Policy responses and travellers’ preferences in pandemics: Evidence from Europe

Abstract

We exploit daily information on flight traffic between 37 European countries from 2019 to 2022 to identify the drivers of air travel demand during and after the pandemic. By applying two-way fixed-effects regressions on daily data at the route-level, we find that the strict lockdown orders reduced bilateral flights by about 17% on average. Our results suggest that the fall in flight traffic from the first and second lockdowns was about 10% and 12%, respectively, while the third lockdown led to a massive reduction corresponding to 22%. The results also reveal that a one-unit change in the aggregate stringency index led to 0.2% decrease in flight frequency, while reducing the number of passengers by 0.7%. The empirical evidence suggests that a substantial change in travel patterns was explained by the spread of the virus itself, as well as voluntary actions based on individual preferences and fear of infection. The main findings of this paper have important policy implications for a more coherent response to any future virus outbreak as it affects airlines and the general economy.