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Analysis Suggests Airline Industry Won’t Recover Until 2028

Analysis Suggests Airline Industry Won’t Recover Until 2028
Joe Cortez

A report suggests while the aviation industry hopes to recover from the COVID-19 pandemic to 2019 passenger loads by 2025, the actual recovery may not come until much later. Data from Leeham News and Analysis suggests the real worse-case scenario may not see “normal” until 2028.

Although passenger loads have shown more resilience over the 2020 Labor Day holiday weekend, the COVID-19 pandemic could have a much longer lasting negative effect. A report by Leeham News and Analysis says the actual recover date for the entire aviation industry may not come until 2028.

Short-Haul Traffic to Recover First; International Harder to Drive Home

Airlines, aerospace manufacturers and analysts have presented their best optimism throughout the novel Coronavirus outbreak, with goals of returning to “normal” somewhere between 2023 and 2025. However, without a successful COVID-19 vaccine or a borders opening to international travel, Leeham suggests that the recovery may stall for another eight years.

Chart courtesy: Leeham News and Analysis

“LNA believes that 2024 is the earliest possible date for a return to 2019 global passenger traffic – and it could conceivably take until 2028,” the report states. “Many obstacles lie between the present situation and a full recovery: deployment of a successful vaccine (or vaccines), rollback of border restrictions, passenger confidence in the medical safety of air travel, and most importantly, restored willingness to pay by business and leisure travelers.”

In order to restart the international aviation industry and install confidence in travelers, the report suggests there are three key actions that need to happen. First, there needs to be “herd immunity,” either through a large majority of people getting vaccinated against COVID-19, or contracting the virus and recovering. This could lead to open borders, and ultimately travelers arriving to destinations without a health visa.

Once the borders open and flyers feel safe in traveling abroad, the last thing is for flyers to once again feel strong about their financial situations. This is a combination of both consumer confidence going up, and airfares being low enough for flyers to feel comfortable traveling.

“As passenger demand increases and airlines restore capacity, more seats will be made available at lower fares as airlines work to stimulate demand,” the report reads. “This will happen as a natural outgrowth of the restoration of business and consumer confidence – but prior availability of lower fares is required to get budget-conscious travelers back in the air.”

Under the current timeline, Leeham projects it will take at least seven years for travel to recover to where it was in 2019. However, if the virus were to get worse, or mutate into new strains, it could take even longer for aviation – and the travel sector as a whole – to once again get back to normal.

Airlines and Airports Demand On-Arrival Testing to Open Borders

Despite the negative outlook, airlines and airports are pressuring government authorities to once again open borders using on-site testing for COVID-19. Over the summer of 2020, a group of four airlines wrote to leaders in the United States and United Kingdom to determine if a testing strategy was plausible. Meanwhile, Reuters reports British Airways and EasyJet are demanding UK health authorities start on-arrival testing over a 14-day mandatory quarantine for visitors, as a “last chance” effort to recover aviation.

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1 Comment

  1. OZFLYER86

    September 11, 2020 at 10:54 pm

    what a stupid statement. No one knows & no one can know. Negative talk won’t help.

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