Aviation is among the few delicate sectors that folded first and are likely to be among the last sectors of the economy to emerge from the Covid-19 induced coma.
For more than 12 months now, aviation has faltered upon great turbulence that has been characterised largely by images of parked aircraft on runways and empty check-in (and check out lobbies) at airports.
Despite the catastrophe, the sector is poised to come back to life by building back better, just like any other part of the economic pie.
According to an April report by the International Air Transport Association (IATA), airlines across the world posted net losses of 126.4 billion dollars last year on the back of the greatest depression for the industry in modern history.
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But before the industry sees the light at the end of the tunnel, aviation will still have to overcome one last big hurdle- the persistent uncertainty from the global health crisis.
According to IATA, the financial performance of airlines will still be worse in 2021 as the world grapples with controlling virus variants and slow vaccinations.
Airlines are still expected to record net post-tax losses of 47.7 billion dollars with operating margins of up to a negative 9.4 per cent.
The United States and Europe are expected to see better prospects in the year to December while carriers in the rest of the world will see a greater hit from weaker international travel.
2021 has seen a weaker start to the passenger business as travel restrictions re-emerge amidst a surge in Covid-19 infections.Global Revenue Passenger Miles (RPK) is nevertheless projected to recover to 26 per cent at the end of 2021 from a negative 51 per cent in 2021. Cargo turnover and volumes continue to grow and show positive future trends.Cargo is expected to remain a strong business for airlines with Capacity Ton-Kilometres (CTKs) projected to grow by 13.1 per cent.Cargo revenues are projected to hit 152 billion dollars or a near equivalent of one-third of the industry’s total revenues.However, costs are expected to remain a challenge with airlines projected to burn through more cash on the overheads. Create and innovate The future of aviation is expected to ultimately start from where it stopped- with the pandemic coming under tighter controls.A pick-up in air travel is expected from greater vaccination rates and the loosening of […]