![]() ![]() Throughout this period, US airlines alone burned an average of US$5.7b per month after adding over US$60b in collective debt. No one could have anticipated just how extreme and sudden the impacts of COVID-19 would be for commercial aviation, illustrated by the change in industry sentiment from month to month since the onset of COVID-19. Grounded: Despite being the “end of the beginning,” COVID-19’s impacts on the airline industry have already been dramatic Indeed, many in the industry feel that we are merely at the “end of the beginning,” as the severity of impacts experienced will prompt a reshaping of the competitive landscape for years to come. The critical question for the industry is where exactly the top of the S-curve is, and how far it is from where demand would be if COVID-19 disruptions never occurred. Ultimately, most projections follow an S-curve trajectory as shown above, with the most rapid recovery occurring in the late 2021 to 2022 timeframe and a return to historical average annual growth rates of 5%-6% afterwards. Further, the timeline on which governments will loosen restrictions or regulations on both domestic and cross-border travel presents another variable to account for when predicting a return of demand. Even after wide vaccine availability within a certain geography, the public’s confidence in the safety of air travel is a wild card. A broader and potentially more consequential debate exists with respect to whether there will be a permanent impairment to business travel demand. ![]() Industry forecasts generally assume that leisure demand will return to pre-COVID-19 levels, though they differ on how quickly that will be achieved. ![]() While every forecast assumes some level of recovery from the demand levels experienced in 2020, opinions on how the recovery ultimately plays out vary widely. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |