American credit rating and market research firm, Moody’s has stated that the drop witnessed in the numbers of air passengers won’t reach pre-COVID-19 pandemic levels until 2023.
The report was disclosed in Moody’s Global airline disruption report published on their website.
Moody’s estimates that global air travel declined from 55%-75% in 2020 alone, which will heavily affect the industry as aviation supports $2.7 trillion of global GDP, and 70 million industry-supported employment which they forecast a 45% decline.
The pandemic affected air travel and led to job cuts and furloughs in the industry, a 45% decline in jobs related to the industry would have a negative effect in tax revenues for countries.
Moody’s predicts that the aviation manufacturers like Boeing and Airbus the last to recover as airlines and airports will post recoveries first, which will be followed by aviation equipment lessors as carriers would become operational.
Two months ago, Nairametrics had reported that for the first time in world history, at the peak of COVID-19, about 90% of the world’s citizens were restricted from traveling, either to return home or to destinations of choice. Without a doubt, the most affected in travel & tourism is the aviation industry.
An estimated 25 million aviation jobs and 100 million travel and tourism jobs across the globe are at risk. That is not all; the growth recorded in the industry in the last seven years would potentially be lost across the world.
Coming back home, in Nigeria, most of the local airlines have either forced their workers to embark on unpaid leave, slashed salaries, or dismissed their workforce. This is how Coronavirus (COVID-19) has brought the global and Nigerian aviation to a standstill.
Meanwhile, the report said global demand dropped as much as 90% during the first weeks on the pandemic, and vaccine would be catalyst to get the industry going adding that bailouts would be needed by the airlines from the government.
“With an effective coronavirus vaccine likely not available before well into 2021 – and likely longer to cover potential mutations of the virus and to ensure adequate dosage supply for the masses – additional government support will be required for the airline industry if employment levels are to be maintained near already reduced levels, and potentially to stave off additional airline restructurings and insolvency proceedings,” Moody’s said.
The airline industry will heavily bank on a vaccine to help its recovery and get it back to pre-coronavirus levels of operation.
For aircraft manufacturers, Moody forecasted a 50% decline in deliveries and expects recovery from 2024. Aircraft leasing is expected to see 80% in rent deferral requests while airports will see a decline in passengers by 2.2 billion until the recovery.