Industry's Flight Paths Forward: Optimistic, Neutral and Pessimistic Outcomes
July 27, 2020
Flight Paths Forward: Boeing’s Long Road To Recovery
A year may seem like a long time in politics, but for Boeing, two years in aerospace must be an eternity as it begins the slow recovery from the unparalleled series of setbacks, accidents and downturns that have struck it since 2018.
Here are some potential outcomes:
Air travel rallies quickly and evenly around the world (2019 levels by 2022), the Boeing 737 MAX returns to service in 2020, and Boeing begins to ramp up production across the board.
Demand recovery takes several years, and sluggish new-aircraft sales hamper most, if not all, of Boeing’s product line.
Demand headwinds are coupled with program-specific challenges, such as lukewarm acceptance of the MAX, problems with Boeing 777X certification or a long-term widebody orderbook slump.
Flight Paths Forward: Airline Industry Starts High-Risk Relaunch
Since June, airlines have started to reinstate substantial capacity, and now must hope demand will return as expected.
Here are some possible outcomes:
Better business confidence indicators translate into greater demand for flying.
With COVID-19 better contained, supported by an efficient vaccine from early 2021, leisure travel returns more quickly than expected as airlines benefit from pent-up demand.
Airlines surviving with government help benefit from a consolidated market; can establish higher pricing earlier.
Short-haul flying recovers almost fully in 2021; long-haul returns by 2023.
More countries manage to contain the pandemic, and the industry’s health measures prove to be efficient.
Air travel returns to 40% below 2019 levels by the end of 2020, recovering further in 2021.
Long-haul flying remains severely suppressed through 2020 but makes a steep recovery in 2021.
A COVID-19 vaccine is created, though the effects of a global recession continue to affect demand.
Traffic returns to precrisis levels by 2023; the industry makes its first post-coronavirus profit in 2022.
Containing the further spread of COVID-19 takes longer than expected and affects major air transport markets such as the U.S.
Bookings weaken and international travel restrictions remain in place longer or are reinstated.
Traffic recovery is delayed and much weaker than forecast; more airlines fail; aircraft production is cut further.
Slow recovery begins only in 2021
after a vaccine reassures travelers.
A return to 2019 traffic levels is achieved after 2023.
See the roundup of 'flight paths forward', a detailed examination looking at the future of the aerospace industry where we explore three possible outcomes—optimistic, pessimistic and neutral— for industries as a whole, the F-35, and companies including Boeing, Airbus and Embraer.