The aviation industry is facing a "crisis of epic proportions" and airfares are likely to rise significantly as international travel takes a number of years to bounce back, according to the CEO of an aviation leasing company.
Avolon chief executive Domhnal Slattery said there are some greenshoots being seen in domestic air travel in China and the US, with traffic in China 20% higher this week than four weeks ago and US bookings for later in the year returning.
However, he said he is "very, very pessimistic on the prospects for international travel" and believes it will take two to three years to recover to pre-Covid-19 levels.
Speaking on RTÉ's The Business, Mr Slattery said a survey by Barclays bank suggested that 40% of business travellers will put off business travel until a vaccine is developed or there is a complete elimination of new cases of Covid-19.
He said the industry "will recover" as travellers "balance the risks against the rewards of travel", but it will be challenging.
Mr Slattery said the crisis will see a re-balancing of what is the right economic price for an airline seat and forecasts airfares rising significantly over the medium term with many airlines already operating at a loss in a low-cost fares market.
He said 90% of the world's commercial aircraft are currently grounded and as many as 4,000 of these may need long term storage.
He said it costs $30,000 per month to store an aircraft such as a Boeing 737.
For Avolon, which leases aircraft, he said it is very challenging as almost 80% of airlines have sought deferrals as they do not have cash for their leasing arrangements.
He said his company is working very constructively on a global basis, but must balance its cash flow needs to repay borrowings.
He said Avolon entered the crisis in robust health and even based on the most draconian forecasts it can survive it.
Mr Slattery said "there will no winners, just survivors" and some airlines and leasing companies will close.