Friday, July 09, 2021

Why now is the right time to be investing in the aviation industry

The COVID pandemic has triggered one of the most disruptive periods on record for air travel. As a result, many carriers have had to make dramatic spending cuts over the past year and the economic impact has put a significant strain on the liquidity buffers of airline companies.

On top of this, it will come as no surprise that successive travel bans and nationwide lockdowns acted as a deterrent for investors – with 2020 going down in the history books as one of the air transport industry’s most turbulent years to date.

However, with the aviation industry now looking to re-build as international air travel begins to re-open, it’s imperative that we see a shift in this narrative and a return to capital investment drives, so that the sector can come back stronger.

So why, despite the ongoing global economic uncertainty, is now the right time to be investing in the aviation industry?

Whilst air transport only accounts for a small share of GDP, it has strong inter-industry linkages with upstream and downstream sectors – making it a crucial part of the economy that cannot continue to be left on pause.

Without a doubt, mobility is at the core of our socio-economic fabric – it supports social connections and enables access to goods and services. Whilst there are numerous pillars of transport, the aviation industry provides an unrivalled global transportation network, creating jobs, economic growth and facilitating international trade.

In the UK alone, the ongoing crisis has resulted in a £271 billion hole in the nations finances, plunging the country into one of the worst economic recessions in recorded history. And it is by no means an exception.

The aviation industry is a crucial facilitator of much broader economic activity, and so, if we are to start to pave a way out of this unprecedented crisis, it’s crucial that the sector has the investment and support it needs to be back up and running as soon as possible.

09/07/21 Bhanu Choudhrie/Airport World

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