Russell Group's Aviation 2021 Outlook

Plane getting ready for takeoff. The pandemic has hit the Aviation industry hard.

The Aviation industry is struggling to achieve a "return to flight" as the COVID cases continue to rise.

With many countries still in the midst of lockdowns, the aviation industry is facing a fight for its future and in doing so will have to re-think it’s future. This was the central finding in a new PWC report, Aviation Industry Outlook for 2021. The report argues that the industry will need ongoing access to emergency liquidity along with Government support.

Currently, governments globally have spent $180 billion on supporting airlines, according to the report.

Yet, despite this support, more than 40 airlines went bust in 2020, according to Cirium, a figure that would have been significantly higher without Government assistance.

Likewise, the report cites data from IATA that says in 2020, the industry as a whole accumulated losses amounting to $118.5 billion and projects a further $38.7 billion loss for 2021.

“In order to survive and thrive in the post-COVID world, airlines will have to fundamentally re-think their fleets, their business models and their finances”, argues Dirk Forsberg, author of the report and senior Aviation Finance Consultant at PWC Finance.  

The Aviation industry’s future was the subject of a recent FlightGlobal Webinar and a key issue that came up was that of business travel, which has been a key driver of revenue growth over the last few decades.

A view that has been echoed by many across the industry is that business travel will be cut back significantly as organisations - bound by a “duty of care” towards their employees - restrict all future travel going forward. This was evident when the restrictions were eased in the summer of last year, and much of the travel was purely for leisure.

Yet, on a positive note, the falling business travel demand could be replaced by “inter-company travel”, as one of the analysts noted on the webinar. If employees in a large-scale organisation are spread out across a country due to home-working then this may require workforces to travel more regularly to meet up.

While the year is still new, the outlook for the industry is the same as everyone else. Full of uncertainty.

Post Date: 26/01/2021

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