AEROSPACE
Industry Groups, Aerospace Analysts Come to Grips With Impact of ‘Worst Year in the History of Aviation’ By Michael C. Gabriele
T
he Covid-19 global pandemic has had a historically negative effect on the commercial aerospace industry. Numbers offer a stark outline of the financial fallout from the novel coronavirus in 2020, but an even darker story is the number of job losses and staff cuts at airlines, aerospace manufacturers, and companies in the global supply chain, including the titanium industry. What are the industry numbers? In June, the International Air Transport Association (IATA) issued a forecast that reported airlines are expected to lose $84 billion this year. In addition the IATA said 2020 revenue would likely fall to $419 billion compared with $838 billion last year. The IATA estimated that 7.5 million flights were cancelled from January to July. The IATA (www.iata.org), with headquarters in Montreal, is the trade association for the world’s airlines, representing 290 airlines or 82 percent of total global air traffic. The IATA is led by Alexandre de Juniac, director general and chief executive officer, who offered a chilling perspective on the June forecast. “Financially, 2020 will go down as the worst year in the history of aviation,” de Juniac declared. He did consider a way forward for the commercial aerospace industry in 2021. “Provided there is not a second and more damaging wave of COVID-19, the worst
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of the collapse in traffic is likely behind us. A key to the recovery is universal implementation of the re-start measures agreed through the International Civil Aviation Organization (ICAO) to keep
‘The impact of Covid-19 on the airlines cannot be overstated as it has taken us into territory we have never seen, and that leads us to our discussion of the state of, and outlook for, world traffic and airplane requirements.’ – Edmund S. Greenslet, publisher of The Airline Monitor newsletter
passengers and crew safe. That’s an important part of the economic recovery because about 10 percent of the world’s GDP is from tourism and much of that depends on air travel. Getting people safely flying again will be a powerful economic boost,” de Juniac said. Deloitte Services LLP, New York,
shared insights and projections in a mid-year forecast on how Covice-19 is likely to affect commercial aircraft production in the near term. Robin Lineberger is Deloitte’s U.S. and global aerospace and defense leader and a principal with Deloitte Services LP. His career includes 35 years as a consultant to the aerospace and defense industry. Deloitte’s midyear forecast anticipated a prolonged recovery for commercial aerospace, while the defense sector remains resilient “According to our previous outlook, the commercial aerospace sector was expected to recuperate in 2020 after experiencing a decline in production in 2019. However, the COVID-19 crisis has significantly reduced both domestic and international passenger traffic, which, in turn, affected deliveries and order books,” the Deloitte report explained. “As a result, the U.S. commercial aerospace sector is preparing for a weak second half of the year.” “With global passenger traffic possibly taking as long as three years to recover to pre–COVID-19 levels, aircraft deliveries are likely to decline more than 50 percent in 2020 compared with 2018—the peak year for deliveries, significantly affecting the U.S. commercial aerospace sector. U.S. defense, however, has not had a major impact, as military projects remain a strategic priority and the nation continues to focus on strengthening its defense industrial
