The Impact of COVID-19 on Malaysian Airline Passengers’ Willingness to Pay for Carbon Offset.

Abstract

Airline industries have been impacted by the COVID-19 pandemic, which has spread to nearly every country worldwide. Multiple countries have imposed travel restrictions to halt this virus’s spread. This precarious situation has significantly impacted the airline industry, reducing passenger volume, flight frequency, and airline flow patterns. Although most scholars have examined changes in passenger volume before and during the COVID-19 outbreak, none of it has been done in Malaysia. Therefore, this study aims to investigate the effect of COVID-19 on airline passengers’ willingness to pay for carbon offset decisions and the value of willingness to pay among Malaysians. The research employed a scenario-based experiment with 150 respondents as the samples. Convenience sampling was adopted and was analyzed using the Contingent Valuation Method (CVM) via STATA version 16. The results showed that Malaysian airline passengers are willing to pay for carbon offset even as many have stopped flying due to COVID-19, with a mean value of RM20.68. This study also revealed that most passengers are still aware of climate change, even though not many are flying during the endemic. The psychological changes in air travelers caused by the pandemic are examined, with managerial and policy implications for the pandemic’s normalization of the pandemic and the airline market’s recovery in the post-pandemic period.