COVID-19, air transportation, and international trade in the ASEAN+5 region

Discussion paper

Zhang, Anming, Sun, Xiaoqian, Wandelt, Sebastian, Zhang, Yahua, Xu, Shiteng and Shen, Ronghua. 2021. COVID-19, air transportation, and international trade in the ASEAN+5 region. Economic Research Institute for ASEAN and East Asia (ERIA).
Title

COVID-19, air transportation, and international trade in the ASEAN+5 region

Report TypeDiscussion paper
AuthorsZhang, Anming (Author), Sun, Xiaoqian (Author), Wandelt, Sebastian (Author), Zhang, Yahua (Author), Xu, Shiteng (Author) and Shen, Ronghua (Author)
Institution of OriginUniversity of Southern Queensland
Number of Pages55
SeriesERIA-DP-2021-34
Year2021
PublisherEconomic Research Institute for ASEAN and East Asia (ERIA)
Web Address (URL)https://www.eria.org/research/covid-19-air-transportation-and-international-trade-in-the-asean5-region/
Abstract

This paper provides an in-depth description of the coronavirus disease (COVID-19) pandemic and its interactions with air transportation in the Association of Southeast Asian Nations (ASEAN) + 5 region, and then links the changes in air connectivity to trade using a gravity regression model. We find that almost all the countries probably reacted too late in their decision to reduce flights in the early stage of the pandemic. As the pandemic evolved, most countries have significantly cut the number of flight connections, especially international flights. The reduced connectivity is found to have a significantly negative impact on trade for time-sensitive merchandise that is essential to consumers and businesses. This points to the importance of the region seeking alternative arrangements to restore air connectivity. We offer a way to construct optimal travel bubbles by using the introduced risk indexes. Other policy issues such as uniform standards and regulations, and regional ‘open skies’, are also discussed.

KeywordsASEAN, ASEAN+5, COVID-19, air transportation, trade
ANZSRC Field of Research 2020380117. Transport economics
380110. International economics
350901. Air transportation and freight services
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Byline AffiliationsUniversity of British Columbia, Canada
Beihang University, China
School of Business
East China Normal University, China
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