Preparing for takeoff? has been saved
Preparing for takeoff?
What is the outlook for the aviation sector as it bids to recover from the impact of the COVID-19 crisis?
Mark Degnan, Partner, Deloitte Financial Advisory Services (Restructuring), considers the outlook and restructuring options for aviation in 2021.
COVID-19 has struck the aviation industry especially hard with travel restrictions to combat the spread of the virus effectively grounding planes for much of 2020. The latest estimates from IATA show that last year, European passenger traffic fell by 73% in the Middle East, 72% in Africa, and 70% in Europe, when measured by revenue per kilometre. Total estimated losses according to IATA in 2020 amount to $118 billion dollars when compared to 2019.
The situation is still changing rapidly even at the time of writing. The emergence of variants of the virus in late 2020 led to travel bans being reinstated between some countries and as we look ahead into 2021, the arrival of vaccines is unquestionably a positive development, even if they won’t provide an instant cure for the sector. However, we anticipate a time lag between vaccines rolling out on a mass scale, and consumer confidence returning.
In this article, we look ahead to what the next 12 months could bring, for airlines, lessors and lenders within the sector. We will outline the various restructuring options available to all stakeholders within the sector, using some recent cases and our market experience.