Looking back, Chu notes that 2020 was a year of turbulence for the aviation sector, and one of the worst ever in airline history. The airline sector is estimated to lose some US$510 billion ($678.14 billion) of revenue to just US$328 billion in 2020, representing a 61% y-o-y drop. Despite massive cost reductions and support by governments worldwide, over 40 airlines had to completely cease or suspend operations in 2020.
OCBC Research Group is turning more positive on the aviation sector and is expecting to see a gradual recovery this year, particularly in 2H2021. This comes on the back of positive progress on vaccine developments and distributions.
In its market pulse report dated Jan 15, analyst Chu Peng says, “We believe that the recovery will be led by leisure travel due to strong pent-up demand, but remain cautious on business travel; domestic travel will lead the recovery while international travel will take a longer time to recover due to headwinds from border controls and travel restrictions.”
