Last year was a truly awful time for global aviation. The COVID-19 pandemic brought about the biggest disruption to the global aviation industry in its entire history.
To Todd Saligman, Capital Group aviation analyst, the numbers are still mind-blowing.
“Putting 2020 into historical context gives a sense of just how bad the decline in aviation volume demand was: Global air travel fell 65% in 2020. Before last year, the worst decline in history was 3% and that had occurred only three times.”1
Nevertheless, despite the magnitude of events, there are several reasons why some sectors within aviation, such as aircraft manufacturing, may be more resilient than they have been in the past.
Aviation has been a fairly stable secular growth industry over the past four decades and the declines seen in 2020 were 20 times worse than the previous worst year in history1. Given the extraordinary fall in air traffic, it’s obvious why it was such a painful year for stocks in this industry.