Even after the worst year in history, the first quarter of 2021 isn’t providing much relief for the aviation sector. However we expect the recovery to start in the second half of 2021, but the sector is unlikely to fully recover before 2024-2025. In the short-term, the real question is if the sector will be back this summer? Unfortunately, the jury is still out.

The aviation sector has just had its worst year in history. The pandemic led to travel bans, and subsequently, airline volumes collapsed. So far, the prospects of easing travel restrictions and the introduction of digital vaccine passports have disappointed the industry.

However, the roll-out of vaccinations will help the sector restart in the second half of 2021. As most leisure travel demand remains on standby, we expect it to return as soon as restrictions are eased and travelling becomes safe again. Revenue passenger kilometres (RPK’s) is expected to start rebounding this year and might end up at an average of 40-50% of pre-pandemic levels in 2021.

Full recovery will take several years, probably until 2024-2025. Domestic traffic in large countries like Russia and China is ahead of the curve as domestic travelling is easier particularly in China which has so far escaped a second wave. Due to ongoing capacity shortages and a positive outlook, air cargo is no longer an overlooked niche. Instead, it is expected to be a continued bright spot in 2021, with new players building up positions in the market.

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