What are bizav’s hopes right now? Can we expect U-shaped recovery?
Encouragingly, some industry experts believe traffic could return so dramatically month-on-month that a forecast U-shaped recovery (of gradual return to pre-crisis levels) will actually become much sharper and nearly V-shaped. That’s less of a long slog at the bottom of the curve and more of a quick rebound.
Does our head of insights and analytics, Harry Clarke, agree? He says: “Forward-looking demand data shows promising signs for July and August travel in the European charter market.”
In the US domestic market, Harry says demand for travel in June surged and is recovering strongly for travel in July, with encouraging signs for August too. Whilst demand patterns are not normal, they are at least showing a positive trend.
What are the expectations for global economic recovery?
Laurence Boone, chief economist of the Organisation for Economic Co-operation and Development (OECD), says: “Most people see a V-shaped recovery, but we think it’s going to stop halfway. By the end of 2021, the loss of income exceeds that of any previous recession over the last 100 years outside wartime, with dire and long-lasting consequences for people, firms and governments.”
Robert Johnson, a finance professor at Creighton University in the US, fears the ‘double dip’ of a W-shaped recovery, as the economy falls and rises before quickly falling again. He’s worried about premature complacency and the notorious ‘second wave’, saying another outbreak of coronavirus “could force another round of social distancing, stalling the recovery”.
Most economists seem to agree we’re not heading for the painfully slow return of a dreaded L-shaped recovery. Research by professional services giant EY reveals only 8% of companies expect recession to last until at least 2022.
Evidence suggests the health of the bizav industry often mirrors the health of the overall economy. Will we see that pattern as we emerge from COVID-19?
Let’s hope the OECD’s gloomy prediction turns out to be wrong or, at least, bizav doesn’t follow the global economy this time. We all want that V-shaped recovery. Here’s a proactive and positive spin on the situation – business aviation could kick-start, not just mirror, the economy.
Are there reasons for that optimism?
Let’s keep the impact of COVID-19 in perspective. Not every sector of our industry entered a steep decline when coronavirus arrived.
Charter demand surged briefly in the early days of the pandemic, providing vital humanitarian evacuation and repatriation services, starting around January 24 with a spike in flights departing China.
And let’s continue to applaud the tireless and inspiring work of medevac teams throughout the crisis.
Sales specialists including Jetcraft confirm aircraft deals have continued to close during the pandemic. In the global financial crisis of 2008, some bizjet prices fell by more than 30% almost overnight. Coronavirus hasn’t hit the market anything like as hard, to the disappointment of some opportunistic would-be buyers.
As an industry, bizav was sitting at the bottom of a far deeper hole in 2008 than we are now.
Could there even be mid- and long-term benefits for bizav after coronavirus?
Right now, people need to fly as soon as possible to keep their companies alive. Airlines will simply not offer the capacity or routes to meet that demand for months ahead. Bizjets are ready to fly the moment borders reopen.
After this health scare, many vulnerable people may never want the anxiety of moving through a crowded airline terminal again. Safety, check-in and boarding protocols could take forever. Can you imagine the stress and delays at airports when people flood back for their long-awaited vacations and much-needed business trips?
Perhaps no one can predict the shape of bizav’s recovery with certainty but, one way or another, our resilient industry will return and prosper.