The aviation industry is an important factor in the functioning of the modern economy, since it enables the connection of people of different cultures and the transfer of cargo faster than any other form of transportation in history, it also employs many people and indirectly helps the functioning of many industries. Among the most affected industries in the Covid-19 pandemic were those in which close contact is necessary, and one of these is the aviation industry, specifically the air transport of passengers. This paper focuses on analyzing the impact of the Covid-19 pandemic on Airlines in Europe. The first part of the paper describes the main characteristics and business models of airlines and the European air transport market. In the third part, the theoretical treatment of basic financial statements and financial statement analysis techniques follows, and along with the theoretical treatment, some of the specifics regarding airline financial reporting are listed. In the fourth part of the paper, the manner and extent of the impact of the Covid-19 pandemic on the business operations of airlines in the world and in Europe is presented. Also, in this part, it is shown how the airlines managed to adapt to new circumstances in order to survive on the market as long as possible, what role state aid played and what are the predictions for the market recovery and airline operations in the future. In the fifth, that is, the last part of the paper the procedures for analyzing the financial statements of two of the most successful airlines in Europe according to their business model are carried out. The analysis aims to show the financial extent of the impact of the Covid-19 pandemic on the financial position and performance of airline operations in Europe. The selected companies are the low-cost carrier Ryanair Holdings Plc and the full-service network carrier Lufthansa Group. The analysis concluded that both companies suffered large losses in 2020, but the beginning of recovery is visible in 2021, which can be read from the growing financial performance indicators. Selected airlines managed to maintain liquidity during the pandemic, but at the cost of increased indebtedness, but it also began to decline in 2021.