According to Moody’s Investors Services, global airline passenger demand will not rebound until the end of 2023 to pre coronavirus levels, and even then only if appropriate vaccines and medicines are available.
In a report, Moody’s analysts including Jonathan Root have written that recovery for airlines and airports will be broadly associated, and this will be followed by aircraft lessors. Makers of aircrafts such as Boeing and Airbus will be the last to recover their foothold in 2019 in the direct aviation industry.
In 2019, passenger airlines constituted approximately 3% of the world’s gross domestic product. A steep fall in demand by over 90% within weeks of the onset of the pandemic has caused a major impact on the global economy.
The success of the vaccine is vital to both fundamentally and financially deciding the recovery of the industry, although further funding from the government would probably be needed to ensure the survival of the airlines, according to Moody’s.
Moody stressed in its report that, “With an effective coronavirus vaccine likely not available before well into 2021 – and likely longer to cover potential mutations of the virus, additional government support will be required for the airline industry if employment levels are to be maintained near already reduced levels, and potentially to stave off additional airline restructurings and insolvency proceedings.”
Long-distance travel may also be modified, with some businesses moving towards point-to-point operations and others switching to hub-to-hub flights, depending on code-sharing or joint ventures to complete journeys.
