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Facing headwinds
Facing headwinds
Insight

Facing headwinds: Conclusion

Key takeaways from our survey and what they could mean for the aviation industry

The past two years have seen huge disruption in the aviation industry. But as this survey shows, the strength and diversity of the sector's financing ecosystem has played a decisive role in responding to the COVID-19 crisis.

Looking ahead, respondents are optimistic about the outlook for the APAC and North American markets, although they are more circumspect about the prospects for EMEA and Latin America. In any event, the speed and scale of recovery in all markets is likely to be shaped by policy responses to the pandemic.

  • APAC is expected to perform well in 2022, thanks to strong GDP growth forecasts of 6.3 percent and increasing demand for regional travel. 85 percent of respondents in this survey expect aviation to grow fastest in this region in the year ahead.
  • North America is also expected to see strong growth in 2022, with nearly a quarter of respondents forecasting rapid recovery as domestic demand springs back to life.
  • EMEA's recovery could be hampered by lackluster GDP growth, as well as by overcapacity in some European markets. Only 7 percent of aviation executives in this survey think Europe will be the fastest-growing aviation market in 2022.
  • Latin America is expected to struggle in the year ahead, with the region's carriers continuing to grapple with restructuring costs against a background of sluggish GDP growth.
  • Potentially higher jet fuel costs add a further layer of uncertainty, underscoring the need for robust hedging strategies. The price of aviation fuel ended 2021 at 217 cents/gallon—up 60 percent from the beginning of the year.
  • Most respondents are optimistic about the financing environment in the year ahead, but risks remain—notably tightening monetary policy as central banks hike base rates in response to growing inflationary pressures.
  • Tighter supply chains, labor shortages and rising energy prices will continue to fuel global inflation in 2022. A key challenge for airlines will be the extent to which they can pass on their own increased costs to passengers and freight customers in terms of higher fares and air freight rates.

 

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