Aviation industry’s very long bull run
Boeing’s 737 Max aircraft is expected to return to service in the second quarter of this year but less than half of the undelivered backlog will have been cleared by the year-end aviation industry experts are predicting.
Boeing has been working for more than a year to fix software that has grounded its bestselling aircraft following two crashes that killed 346 people.
Despite the controversy and a further software issue reported to regulators in recent days, experts believe the 737 Max will return to service in 2020. The global aviation industry forecast from PwC was launched this morning in advance of two major airline conferences in Dublin this week: Airline Economics Growth Frontiers and the Airfinance Journal conference.
The forecast, titled, ‘The End of the Innocence’ by aviation consultant Dick Forsberg, states the aviation industry is entering 2020 with a sense of change in the air following a decade-long bull-run where the industry was profitable in every one of those 10 years earning a cumulative net profit of €200bn.
“While still comfortably profitable, 2019 was a bumpy year in many respects, raising existing challenges on a scale rarely encountered in the aviation industry,” Mr Forsberg said.
“Now, at the start of a new decade, a sense of change is in the air. New uncertainties and risk factors are increasingly coming to the fore,” he said.
Mr Forsberg said that the challenges faced by Boeing have raised issues that go far beyond the confines of the 737 MAX and its customers.
“Aviation’s regulatory regime is under the microscope and must undergo some fundamental changes in the months and years ahead, with consequences for the original equipment manufacturers and their existing and future aircraft models and variants,” he said.
The rapid development of ‘flight shame’ and its spread from Scandinavia into other parts of Europe, has already had an effect on demand for short-haul travel, the report notes.
Mr Forsberg said that climate-change concerns will put more pressure on European domestic and regional growth prospects.
