The Heterodox Economics of Passenger Airlines, Plagues, Pandemics, and Other Unhealthy Occurrences

Abstract

I am concerned with insights heterodox economics, and particularly the new institution economics, can offer regarding interactions between health emergencies and the airline industry. Air services not only facilitates the transmissions of diseases among humans, and between animals, but on the positive side, can expedite the movement of medicines and the transfer of those afflicted during pandemics and epidemics. They can serve to limit the outbreak of disease by providing “mercy flights” to regions poorly served by other modes. Significant challenge confronting carriers during a major event, however, often included immediate financial shocks as well as ensuring their operations do not contribute to the spread of disease. These economic challenges for both commercial carriers and public policymakers involve sources of finance for what is, in this context, a semi-public service as well as the extent to which airlines should retain standby capacity extending resilience to the air-service supply chain. Conventional neoclassical economics, while still at the center of analyzing many of these sorts of issues, has increasingly, because of its rigid assumption and poor forecasting record, been supplemented by heterodox economic thinking. This trend has been reinforced by progress in fields such as psychology. What I demonstrate is that heterodox economics, and especially the role of institutions, offers a more complete picture of the interactions between air transportation and the spread of disease.

Citation

Button, K. (2024), "The Heterodox Economics of Passenger Airlines, Plagues, Pandemics, and Other Unhealthy Occurrences", McCarthy, P.S. (Ed.) Airlines and the COVID-19 Pandemic (Advances in Airline Economics, Vol. 11), Emerald Publishing Limited, Leeds, pp. 19-47. https://doi.org/10.1108/S2212-160920240000011002