Impact of Covid-19 on Macroeconomic Factors and Performance of Airline Companies of Pakistan

Abstract

Purpose: The main objective of current study is to analyze the impact of Covid-19 on macroeconomic factors (i.e. GDP, Inflation rate, Interest rate and Unemployment rate) and performance of airline companies of Pakistan. In current study the researcher analyses that how the pandemic situation affects the macroeconomic variables as well as the performance of the airline industry.

Originality of the Research: This paper is new in terms of the topic because in current time period there is no such study has been found because it takes both the macroeconomic factors as well as the performance of the airline companies of Pakistan, and it also provides the recommendation which is used by the managers and policy makers to overcome the risk.

Design and Methodology: Data has been taken from World Bank website and IMF website because there data are more accurate as compared to other resources. For measuring the performance of the airline companies of Pakistan; the data has been collected from the official websites of the airline companies. For measuring the pre effect of Covid-19 November, December and January months are selected and for post effect of Covid-19 February, March and April months are selected.

Findings: Analysis of the study shows that the financial performance of airlines companies of Pakistan is not so good and they face heavy losses and cash burn which also affects their reputation in the market. PIA has drastically affected due to the Covid-19 pandemic. Result of current study suggests that inflation rate of country lower down in this situation because of world-wide inflation rate decreases. Interest rate of Pakistan decreases in Covid-19 because due to lockdown situation investment of the people or investors decreases. Unemployment rate of Pakistan is 1.5% higher as compared to 2019 unemployment rate. It affects employees of Pakistan badly.

Limitations and Future Directions: Limitations and future directions are important to improve the work of the government as well as it improves the research quality. Limitations and future directions are also given for future researcher.

Practical Implications: The airline performance mostly affected part of the economy because the immediately shutdown position affects the performance of the companies and the passengers try to stay at home. During this current government and covid-19 scenario the unemployment rate is too high which shows that the policies of government are not so good for improving the life style of individual people and they should improve and amend the policies for employees so that the unemployment rate should be lower down.