A new report says that despite the pandemic, a recovery is now underway across much of the aviation industry.
This recovery is expected to continue to gather momentum as the travelling public regain confidence and Covid moves from pandemic to endemic.
PwC's "2022 Aviation Industry Outlook" reveals that with the various Covid-19 restrictions, passenger numbers only recovered by an estimated 18% in 2021 from 2020 levels and were still only barely half of the pre-Covid numbers.
Unsurprisingly, there were wide regional variations, with North American Revenue Passenger Kilometers recovering by 72% and Asia Pacific traffic dropping by a further 10%, the report stated.
Today's report was authored by Dick Forsberg, a Senior Aviation Finance Consultant at PwC Ireland.
Despite all of the Covid-19 headwinds over the past 20 months, the survival rate of the airline industry has been higher than initially expected, with "only" 64 airline failures, including 30 that have ceased operations, 15 currently in restructuring and 19 that have already emerged, PwC said.
It added that the fall-out would have been considerably greater without the "extraordinary" levels of government support that have been made available to airlines since the start of the pandemic.
This support reached well over $200 billion in total.
"The exceptional levels of indebtedness taken on by airlines will continue to present challenges that may yet trigger failures or need to be addressed through restructuring," it added.
PwC predicts that both orders and deliveries of new planes will increase, ending the year close to pre-Covid levels, while lessors will once again finance over 50% of new deliveries.
It also predicts that sustainability will remain a driving force for airlines as Original Equipment Manufacturers (OEMs), investors and financiers become more widely embedded in company strategies and policies.
Dick Forsberg said it is clear that when Covid-19 passes, passenger response will be immediate and strong - people will seek to return to the skies as soon as they are physically and legally able and feel safe to do so.
"For example, travellers were quick to respond when restrictions were eased, such as when the USA removed barriers to inbound travel for 34 countries, including the EU, in November 2021," Mr Forsberg said.
The majority of the traffic recovery seen to date has involved leisure travel, including vacations and visiting friends and relatives.
"The recovery in business travel remains more problematic, particularly for high-yield long-haul passengers, where full-service network carriers often depend on their premium fares and have invested heavily in business class cabins," Mr Forsberg said.
"Airlines will therefore need to modify their product offerings, with expanded Premium Economy cabins replacing some business class capacity to accommodate price-conscious business travellers," he added.
