2020 Aviation, and a bleak future ahead

From Boeing to bailouts, the aviation industry had one of its worst years in 2020, a radical comedown after a run of profits right up to coronavirus lockdowns.

- Ipsit Roy

Undeniably, the aviation industry has been hit hard by the Covid pandemic. To date, it is crippling from severe financial losses and painfully diminished market values to shrunken networks and mounting debt piles,

Airline borrowings have climbed to record levels as carriers struggle to keep their heads above water. State aid to the sector has reached a gargantuan $220 billion, according to IATA. Credit ratings company Moody’s Investors Service forecasts a further $22 billion of liabilities will be added in 2021.

Companies will also need to refinance some of the emergency debt accumulated, while those now saddled with government shareholders must examine whether they can repay borrowings and become masters of their own destinies again.

The fate of global aviation

Carriers will hemorrhage more than $118 billion this year and almost $39 billion in 2021, according to IATA. That’s way beyond the trade group’s predictions in June, when carriers retained hopes for a late-summer surge in traffic, only to see them dashed by new waves of the virus.

The estimated losses represent the worst two years for the industry and dwarf those racked up during the last major aviation slump in 2008. They also mark an abrupt end to a decade-long run of positive earnings, highlighting the lingering vulnerability of carriers even after years of consolidation and investment in more efficient aircraft.