It is difficult to fathom the extent to which the Covid-19 pandemic has damaged the aviation industry. In 2020, the total revenue of this industry came to $328 billion, which was 40% of the previous year’s income.
The pandemic impacted the airlines, their employees and the associated service providers that airlines require for maintenance, food preparation, and other operational activities. With no demand for air travel, the need for additional services also declined.
Besides the pandemic’s financial effects on the aviation industry, stringent hygiene and safety measures had to be implemented.
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Taking a look at 2020
The pandemic resulted in a decline of 64.6% in global passenger traffic, equating to more than 1 billion passengers, with Europe and the Middle East regions being the worst affected.
Aeronautical revenues are directly linked to traffic and passenger-related charges. Furthermore, air traffic generates over 95% of airline revenue.
The Air Transport Action Group (ATAG), a global association representing all air transport sectors, estimated a loss of 46 million aviation-related jobs, roughly 52.5% of those in the market. Furthermore, a loss of $1.8 trillion in economic activity which would have been supported by the aviation industry was also noted.
Although some countries have reopened domestic travel towards the latter part of 2020, the numbers were insufficient to make up for the losses. Furthermore, passengers were cautious about flying for the first time since the lockdown due to fear of infections.
Aviation forecast for 2021
The damaging impact of the pandemic is still felt in 2021. Air traffic has increased; however, the industry will take decades to recover. The estimation globally is that the industry will suffer over $94 billion in lost revenue by the end of 2021.
Europe’s estimated revenue losses are more than $4 billion by the end of 2021, the worst affected region. The revenue for the Middle East and Europe will result in a decrease of 58.9% and 58.1%, respectively. However, Asia-Pacific has recorded the best recovery at 59.7%.
The vaccination rollouts and re-opening of leisure and travel businesses are vital to improving domestic and international air traffic numbers.
Furthermore, innovation in digitalization will transform the travel experience. Proof of vaccination and Covid-19 test results will be required and will be accessible via mobile apps.
How can you overcome the crisis?
In this uncertain economic climate, people are wondering whether it is a safe bet to invest in aviation-related stocks. Whie things don’t look good at the moment, this may be an opportunity waiting to be seized. In general, investing wisely is the key. Axia is a broker that offers CFDs on over 400 instruments, including forex, stocks, indices, commodities, and futures CFDs, to trade via its multiple platforms. The brand provides expert analysts to consult with on matters like aviation stocks and others.
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Axia offers clients five account types: Bronze, Silver, Gold, Platinum, and Diamond. All account holders are provided daily market analysis, 1:400 leverage, low spreads, and stop-out levels. In addition, welcome bonuses are offered to Gold, Platinum, and Diamond account holders.
Axia’s support staff operates 24 hours a day, five days a week, and are reachable by phone or email, so they are easy to reach and consult with.
Bottom Line
The aviation industry might take years to recover from the damage that the pandemic left. The global economy is still recovering slowly, and with new virus strains emerging, the future is still uncertain.
Axia offers clients the opportunity to access the financial markets via intuitive trading platforms, making fast decision making processes more accessible, which is important in this economic reality. Furthermore, the broker provides numerous attractive benefits and support services to ensure clients’ needs are met.