The COVID-19 pandemic has swept the globe, impacting every industry, but few industries have been disrupted to the same extent as the global commercial aerospace market. This year was going to be a year of reconfiguration that would affect Boeing alone; however, it has turned into a year of survival for the entire global industry.
Richard Aboulafia serves as Vice President of Analysis at Teal Group, where he manages consulting projects in the commercial and military aviation sectors and analyzes broader defense and aerospace trends. He has advised numerous aerospace companies, including most prime and many second- and third-tier contractors in the United States, Europe, and Asia. He also advises numerous financial institutions on aerospace market conditions.
At MTForecast, Aboulafia鈥檚 presentation, 鈥淎ircraft Markets: From Great Downturn To Great Recovery?鈥� will address the key factors and trends affecting the commercial aircraft industry over the next several years and what to look for in predicting recovery. Although the sector is experiencing a downturn unlike any other in its history, there are some positive pieces of news. Unlike the 2008 downturn, global financial markets have remained relatively strong and are still financing new deliveries.
Aboulafia will discuss revenue expectations for the sector for the next several years as well as current orders, production and delivery data, and rates of cancellations and deferrals. In addition to Boeing, Aboulafia will overview the financials of the largest global players, including Airbus, Bombardier, and Embraer.
鈥淎ll downturns are different, but this downturn is particularly different,鈥� said Aboulafia. 鈥淚t鈥檚 not a typical buildup of excess supply with a demand drop triggered by an exogenous shock. Instead, the world economy has entered what Paul Krugman terms 鈥榓 medically-induced coma.鈥� For the past 50 years, airline traffic has never declined by more than about 3% in a given year. But due to the pandemic, most estimates put this year鈥檚 traffic drop at around 60%.鈥�
Aboulafia will cover the data most important to predicting the length of the downturn and when people will start flying again, including the vaccine timeline, various scenarios about how long it will take global air travel to get back to 2019 peak levels, and the possibility of a slower return to air travel.
鈥淢ost scientists think we鈥檒l see an effective vaccine in mid-2021 鈥� with additional time needed for distribution 鈥� which means we cannot expect to see air traffic recovery for about two years, and no recovery in deliveries for at least three years, so in late 2023 or early 2024. The bright side is that growth will be significant starting sometime in 2023, so it might be best to focus on the road there as well as reaching the peak,鈥� said Aboulafia.
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