article | 02-Jun-20

COVID-19: Implications for the Commercial Aviation Industry


Alton Team: Adam Cowburn,  Adam Guthorn,  Bradley Dailey,  John Mowry,  Jonathan Berger,  Katya Bulatova,  Laetitia Achille,  Leah Ryan,  Min Ma,  Yuichi Takayama

Market: Airports,  MRO & Aftermarket,  Aerospace,  Aircraft Leasing & Financing,  Transaction Advisory,  Airlines,  Business & General Aviation

NEW YORK – June 2, 2020: The ‘New Normal’ for the aviation industry is 18-24 months away and key players must prepare for an extended ‘Covid overhang’ period and a long, turbulent journey to recovery, according to Alton Aviation Consultancy.

 

The global aviation advisory firm today released its independent report ‘Covid-19: Implications for the commercial aviation industry’, offering detailed insight into the ongoing crisis for the whole aviation industry. The comprehensive paper sets out a list of mitigating strategies and actions for airlines, aircraft lessors, MRO (Maintenance, Repair and Overhaul) providers, aerospace manufacturers, and airports to prioritize resources and manage risk.

 

Adam Cowburn, report author and managing director in Alton’s Hong Kong office, says:
“The surest way out of this crisis is for every player across the aviation value chain to work in tandem with governments and other stakeholders to put airlines back in the air and get revenues flowing again.

 

“While the fight against the virus continues with travel restrictions and quarantines to limit spread, we are cautiously optimistic that the immediate phase of deep crisis for the aviation industry may come to end in the not-too-distant future. Before settling in the New Normal, the industry will pass through an extended period we are calling the ‘Covid overhang’ – certain aspects of life may return to varying degrees of normalcy, but the influence of Covid-19 will continue to loom large over the aviation industry. Businesses must not let unrelenting ambiguity get in the way of continuous mid- and long-term strategic planning.”

 

Jonathan Berger, report author and managing director in Alton’s New York office, adds:
“The current crisis is unlike anything the industry has seen before. Significant focus to date has been on the very visible impacts Covid-19 has had on airlines, but numerous other players in the value chain – MROs, lessors, airports, manufacturers, and others – are reeling from the impact of Covid-19 and need to chart a path out of the current crisis. The companies that emerge the strongest will ultimately be those that plan well and act decisively.”
Alton’s report sets out a playbook for navigating the turbulence caused by coronavirus, offering analysis of the impact across the entire aviation industry, and outlining opportunities available for growth and restructuring.