Avolon predicts aviation industry will bounce back faster than anticipated

Aircraft leasing company Avolon has predicted the recovery in the aviation industry will be faster than anticipated, driven by the availability of vaccines, fiscal stimulus and monetary easing.

Although 21021 would be challenging, the company said, major airlines would weather the crisis, mainly due to government supports. Low-cost carriers would be in a good position as recovery takes hold.

The company made the predictions in an outlook paper titled Looking to Recovery.

It also predicted there would be more start-up airlines in 2021 than had failed in 2020, with some of the highest growth airlines in the next decade starting up in 2021 and 2022.

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Avolon also expects the airline funding gap to be bridged by lessors, through placements and sale leasebacks.

However, environmental issues would continue to be a major challenge during the year, with technology set to play a major role in reducing the industry’s carbon footprint .

“Air traffic management systems must be modernised, sustainable aviation fuels must build scale and new technologies must be developed. This is a global challenge in which all stakeholders will contribute to the solutions,” the report said.

Author of the paper Jim Morrison, Avolon's head of portfolio management, said 2020 was the most challenging year the aviation industry had faced.

“In response governments and aircraft lessors stepped up to support airlines. Commercial aviation has demonstrated its resilience repeatedly. It has managed through wars, terrorism, pandemics, oil spikes and financial crises. Our fearless forecasts for 2021 published today are premised on this optimism but anchored by the realism that challenging months are ahead.”