The advent and rollout of vaccines will start to drive a partial recovery in the aviation sector in 2021, but with significant variance between global regions, according to new data from IBA.
In its recent 2021 Market Update webinar, IBA the aviation data consultancy, outlined the key factors affecting recovery rates across different regions, as well as highlighting changes in aircraft orders and deliveries, market values and lease rates.
IBA forecasts a strong economic recovery in 2021, with global GDP recovering by 4% but still down 5% on 2019. Estimated GDP growth rates for 2021 will vary between regions from around 2.5% in Japan and Russia, around 3.5% in the EU and US, and as high as 7.9% for China.
The differing levels of vaccine stocks held by countries will affect the speed and extent to which they reopen their borders. 10 billion doses of the eight approved vaccines have now been ordered, with 50% of that commitment from advanced economies covering just 13% of the global population. The countries with orders covering 100% or more of their populations are largely across the Northern Hemisphere, along with Australasia, and IBA forecasts this will significantly affect global travel patterns and airline route commitments in 2021 and beyond.
IBA forecasts a mixed picture of traffic recovery across the globe, with North America set to lead regardless of vaccine coverage with revenue passenger kilometre (RPK) growth of around 60%. RPK growth of around 50% is expected for Europe, who will roll out the vaccine aggressively to reduce restrictions before the summer, and Asia Pacific which will recover strongly, continuing a trend started in China in the second half of 2020. All other regions are forecast to see RPK growth of around 30%, including Latin America where traffic will rise steadily, Africa where a slow recovery is expected, the Middle East where volumes will take time to return, and Australasia which has growing domestic traffic but a cautious approach to international air links.
Current aircraft utilization levels also differ substantially across the globe. Chinese air traffic had recovered by December to pre-Covid levels, although with a lower proportion of international traffic and load factors also lower at around 70%. Russian air traffic recovered fully by August 2020, but by December was a third lower. Flights in North America are only at half of pre-Covid levels with load factors at around 50%. Europe saw a partial recovery in Summer 2020 but by the end of the year, traffic was just a third of pre-Covid levels. Traffic in the Middle East has recovered partially to just under half of pre-Covid levels, but load factors are currently less than 40%
Phil Seymour, President of IBA, says: “There is a long road ahead for the aviation sector in 2021. The arrival of vaccines is positive news, but the variance in their roll out and in a number of economic and industry factors, will ensure we see a patchy recovery with marked differences between global regions.”