The suggestion of returning to pre-COVID levels is “becoming obsolete” and the aviation industry should update its focus from recovery to future growth, said MUFG’s Global Aviation Finance Office (GAFO) in its 2024 projections update. It added that the notion of revenge travel has become less relevant for 2024 as most airline customers have “managed to clock up some airmiles in the last few years”.
GAFO found that most regions had recovered by 2023 and expected the APAC region to recover fully in 2024, with particular regard to China reopening following strict pandemic restrictions being dismantled. The report added: “Leisure travel has grown back whilst business travel still needs to catch up, having been replaced in part by Zoom and Teams calls.”
It added that more merger and acquisitions are expected for the year. Lessors and airlines will likely see this as a viable method to gain “some economies of scale” such as securing capacity and market share. It further anticipates large lessors “absorbing” smaller lessors and their portfolio whilst these smaller lessors will be pushing for additional assets to add to their portfolios.
The greater consolidation in the aviation is set against the background of supply chain issues. The report added: “High demand for parts and materials is driving market appetite for end-of-life assets, even extending to younger assets for which the value of the stripped-down parts may be greater than that of the aircraft as a whole.”
It said that despite the supply chain constraints and growing geopolitical issues, the pandemic has fostered an industry that has “become stronger and more resilient.”
Back to growth for the aviation industry, says MUFG
