It’s been a week of contrasts.
There’s the International Air Transport Association (IATA) warning that the airline industry will burn through US$77 billion in cash during the second half of 2020 (almost $13 billion/month or $300,000 per minute).
easyJet, for example, despite raising over £2.4 billion in cash since the beginning of the pandemic from funding sources such as debt and equity, has just posted its first ever full-year loss, and expects to have a fourth quarter cash burn of £700 million.
The stats behind this loss show just how a once strong balance sheet has been eroded: full-year passenger numbers decreased by 50% to 48 million as capacity decreased 48% to 55 million seats. Based on current travel restrictions in the markets in which it operates, easyJet expects to fly approximately 25% of planned capacity for Q1 2021.
While Boeing’s 2020 Boeing Market Outlook projects demand for 18,350 commercial airplanes in the next decade – 11% lower than the comparable 2019 forecast – valued at about $2.9 trillion, the picture in business/VIP aviation is a lot rosier.
Honeywell’s 29th annual Global Business Aviation Outlook forecasts up to 7,300 new business jet deliveries worth $235 billion from 2021 to 2030, down 4% in deliveries from the same 10-year forecast a year ago. Despite the dip, 4 of 5 business jet operators in the survey indicate that purchase plans have not been affected by the COVID-19 pandemic.
“Business jet usage is expected to rebound to 80% to 85% of 2019 levels in the 4th quarter of 2020 and fully rebound by the middle of 2021, indicating demand for business jet travel is returning after the global pandemic caused a slowdown in the industry earlier this year,” said Heath Patrick, President, Americas Aftermarket, Honeywell Aerospace.
For once, the grass does appear to be greener on the other side.
