Will aviation recover? The gradual move towards industry revival
24 June 2021
The past year has been an incredibly difficult one for the aviation sector across all functions and areas of the world. After such a significant period of financial loss, one of the most pertinent questions is- will aviation recover from this huge setback? Industry experts predict a gradual return to pre-covid levels as lockdowns begin to ease and consumers are able to travel again. Let’s take a look at the hurdles that the industry will need to overcome and how the covid-19 pandemic might shape things going forward.
The key challenges faced in 2020-2021
The covid-19 pandemic and subsequent lockdown restrictions across the world saw aviation activity slow down considerably. Safety concerns, quarantine requirements and essential travel only made airplane travel either impossible or unappealing for many people. In addition, differing travel restrictions from one country to the next and constant change and uncertainty made it very difficult to plan ahead for potential travel.
This resulted in:
- International flights falling by nearly 80% and domestic flights by 70%
- A $510 billion loss of revenue
- 61% drop in passenger levels
- Having to cut $365 billion worth of costs
- 46 million job losses in travel and tourism
Prior to the pandemic, it was anticipated that 2020 would bring further growth to the aviation sector, having experienced a steady period of growth in the years preceding it, which made the losses hit even harder. Looking at stats like this it’s difficult to feel optimistic about aviation recovery and be wondering will airlines recover at all from this. Despite this, there is optimism in the air for the coming years with predictions for gradual regrowth of the sector.
Aviation sector recovery
The International Air Transport Association (IATA) released a report detailing the prospective recovery of aviation industry activity, looking at aviation sector recovery from past ‘demand shock’ events, such as the SARs outbreak in 2003 and the recession in 2009. One of the key factors that they outline as a positive sign for aviation recovery is the consumer demand for travel.
After the long periods of lockdown and continued restrictions, people are keen to travel as soon as they can to get a welcome change of scenery or to visit far away friends and family. In addition to this, changes to spending patterns mean that consumers have saved money during the pandemic- an average of £130 billion across the UK according to the Office for Budget Responsibility (OBR). This gives a positive outlook that people will have money to spend on air travel, which bodes well for the recovery of airlines and the sector as a whole.
Now that vaccinations are underway, this is another key step in the right direction for aviation and allowing more freedom for travel. Some travel destinations will require proof of a covid vaccine before allowing entry across the border and vaccine passports are going to be made available to EU residents to easily show their vaccination status while travelling. In addition, having appropriate health and safety measures in place for each step of a passengers’ journey is crucial to stop the potential spread of covid-19 and to assure the safety of both workers and passengers. The importance of this is echoed by Luis Felipe de Oliveira, World’s Director General of Airports Council International (ACI):
“To ensure that aviation can continue to provide the economic and social benefits, it is crucial that we work together across the industry and hand in hand with ICAO and international health organisations to ensure a coordinated recovery while providing crucial reassurance to travellers and staff.”
What does the future hold for aviation?
After experiencing such huge losses, it’ll take time for the industry to make a full recovery. However, a gradual return to prosperity is expected over the next couple of years. The International Air Transport Association (IATA) forecast that both revenue and passenger numbers will return to pre-covid levels by 2023. They expect to see steady growth over the next couple of years, but this will of course be dependent on government support and careful handling of covid restrictions and vaccine rollouts as things start to move back towards normality.
Overall, the question of ‘will aviation recover’ is understandably a concern for many across the industry but there is optimism for the future. Sustainable growth is central to the recovery of aviation, as is managing safety and expectations for everybody involved.
Prepare to take to the skies
Our aviation hub contains helpful resources for navigating the current challenges in the industry.