The aviation industry today
It is pretty much general knowledge that the global pandemic is taking a massive vital toll on almost all sectors of the world today. Industry experts speculate that no industry has felt this impact more than the aviation sector. Some industries (like education) have been able to bounce back very fast with the advances in remote-enabling technologies, but this doesn’t seem to be the case with the aviation sector.
China, the original epicenter of aviation, was the first to ban international and domestic travel in a bid to curtail the virus spread. Not long after, other countries followed suit, and that was the very first major hit taken by the aviation industry. The financial implication of this development was limited at first, but when the virus spread reached the global markets of North America and Europe, the dire situation of the aviation industry came fully to light.
Today, however, the industry is starting to witness a turnaround in its luck as the vaccinations and low spread of the virus have prompted a gradual rise of the aviation sector from the metaphorical hole it was stuck in.
Can the aviation industry bounce back?
Yes! That is very certain after all, change is the only constant variable in the world. Recent trends in the industry and the world fully support this fact as the virus spread is on the downfall thanks to vaccinations from the medical industry. The growth speed of the industry is, however, predicted to be slow due to factors such as the lingering effects of the virus, the skepticism of customers, and key aviation industry players switching markets or dropping out of the game entirely.
Analyzing the chart above, we can see a steady rise in travel since 2004 and a significant downturn in passenger travel when the virus first struck the world. Approximately 4.8 billion passengers boarded airlines in 2020 before the pandemic, and 1.8 billion passengers boarded after the virus hit, a number that has not been recorded since before 2004. The current year is, however, witnessing a slow but gradual rise in passenger travel as the effects of the global pandemic dwindles.
Statistics and forecast in the aviation industry today
Since it has been established that the aviation industry took a massive dive amid the global pandemic and that it will eventually bounce back, however slow, let’s look at some of the highlights and trends in the industry today.
- Global losses for airlines in 2020 amounted to US $118 billion
- Total demand for international airline services was down 66% in 2020 compared to 2019
- At the height of the downturn, almost 50% of planes were parked because there was no demand.
- Airline firms are hastening to transform passenger jets into freighters, as the value of used planes descends amid the pandemic.
- It is anticipated that the number of passenger-to-freight transformations globally will increase by 36% in 2021.
- The boom in e-commerce is presumed to further promote the trend.
The road ahead
The global aviation industry is on the edge of significant changes brought on by the pandemic. One such change is the need for passengers to be much more aware of what travel restrictions may exist in other countries going ahead and obligations to meet the demands a particular country has in place.
The industry is also witnessing exciting innovations with the introduction of electric vertical takeoff and landing (EVTOL) aircraft and the integration of Unmanned Aircraft Systems (UAS). New technology not only improves efficiency and safety in the industry but also results in more environmentally-focused sustainable operations.
Finally, the impact of Covid-19 has been a sluggish burn in that it’s going to be quite a while before air travel fully returns. The industry has always been cyclical and so always has upswings and downturns. While this is one of the greatest downturns the world has seen, the industry will return as it always does, and experts are confident in and excited about the future of the aviation sector.
For more extensive analysis and Market Intelligence reports feel free to approach us or visit our website: Venture Capital Market Intelligence Reports | VCBay.
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