Most airlines are hopeful for the recovery from the pandemic to begin this year and really take off in 2023 or 2024, to get back to pre-COVID levels of travel.
Currently, Boeing is forecasting the need for over 43,000 new aircraft deliveries globally over the next 20 years. In fact, the Boeing forecast says that there will be a demand for 763,000 new pilots worldwide over the next 20 years.
Something that the airline industry has in the works is a digital health passport. Essentially, they are developing an app that permits passengers to quickly see what the COVID requirements are for the country they are traveling to and also upload their COVID test results or vaccination records. If you want to talk about short-term versus long-term consequences of COVID-19, this could be the long-term new normal.
Financially, airlines are facing inflationary pressures, along with other industries. The average airline’s fares remain well below 2019 levels, and the airline industry’s debt (and interest expense) will remain elevated through at least 2024. New ticket sales are also rising but demands for corporate and long-haul international air travel continues to lag, leaving revenues to decline.
Despite this fact, airlines are still hopeful. United said it expected to be able to make money, even with corporate and long-haul international travel down. The airline’s chief executive, Scott Kirby, said he was confident United would beat its 2019 profits in 2023.
This being said, there is still hope.
Air cargo demand, which reached an all-time high in 2020, rose even further in 2021. Business travel will take longer to recover, and even then, we estimate it will only likely recover to around 80 percent of pre-pandemic levels by 2024.
Remote work and other flexible working arrangements are likely to remain in some form post-pandemic, and people will take fewer corporate trips. Leisure trips will help the airlines to recover. But the experience of flying in the United States in the coming months will be considerably different from 2019.
Airlines are likely to keep many of their pandemic policies in place, including requiring passengers to wear masks. Some people on domestic flights may find themselves on the larger jets previously used only for long international trips. As things progress, we expect to see travel to become greener and more efficient due to the removal of less efficient aircraft, with more investment into IT and digitization.
