Global rating and marketing research agency, Moody’s has warned that global air passenger slump will continue until 2023 due to the effect of the COVID 19 pandemic.
Moody’s gave this grim forecast in a Global airline disruption report published recently.
“With an effective coronavirus vaccine likely not available before well into 2021 – and likely longer to cover potential mutations of the virus and to ensure adequate dosage supply for the masses – 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,” Moody’s said.
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Moody’s disclosed that global air travel declined from 55% to 75% in 2020 alone, which will heavily affect the industry as aviation supports $2.7 trillion of global Gross Domestic Product, GDP, and 70 million industry-supported employment which they forecast will suffer a 45% decline.
Meanwhile, the report said global demand dropped as much as 90% during the first weeks on the pandemic, and vaccines would be the catalyst to get the industry going adding that bailouts would be needed by the airlines from the government.
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The report further stated that aircraft manufacturers will suffer a 50% decline in deliveries and expects recovery from 2024. Aircraft leasing is expected to see 80% in rent deferral requests while airports will see a decline in passengers by 2.2 billion until the recovery.
Recall that with 7.5 million job loss and $419b lost in revenue according to statistics from the International Air Transport Association (IATA), the aviation sector has been one of the worst-hit by the COVID 19 pandemic.
Moody’s Investors Service has now warned that the recovery for airlines and airports will be largely aligned, followed by aircraft lessors as carriers return fleets to service, Moody’s analysts including Jonathan Root wrote in the report. Manufacturers such as Boeing Co. and Airbus SE will be the last in the direct aviation industry to regain their 2019 footing, they wrote.
