Status of the Industry: Airlines & Air Travel Carlos Ozores - - PowerPoint PPT Presentation

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Nov 01, 2022 522 likes •637 views

icf.com/ aviation Status of the Industry: Airlines & Air Travel Carlos Ozores Principal & Americas Status of the Industry Webinar Consulting Lead April 28, 2020 Three main questions Where are we? Where are we going? What will the

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icf.com/aviation

Status of the Industry: Airlines & Air Travel

Carlos Ozores Principal & Americas Consulting Lead

Status of the Industry Webinar April 28, 2020

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ICF proprietary and confidential. Do not copy, distribute, or disclose.

Three main questions

Where are we? Where are we going? What will the future look like?

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ICF proprietary and confidential. Do not copy, distribute, or disclose.

Global aviation has virtually shut down, with no resumption date in sight

3 Source: ICF analysis of Flighradar24 data

Jan Feb Mar Apr 120% 100% 80% 60% 40% 20% 0% North Am Asia Latam Europe Africa

Commercial Flights, 2020 vs. 2019

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ICF proprietary and confidential. Do not copy, distribute, or disclose.

Which way is North?

Bermuda Triangle

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ICF proprietary and confidential. Do not copy, distribute, or disclose.

The timing and shape of recovery depends on our ability to control or mitigate the pandemic

Essential passenger flights
Repatriation flights
Cargo flights

Quarantine Phase 2-3 months? Pre-Recovery Phase 6-18 months? Recovery Phase Several years

Domestic resumes first
Gradual border opening limits

International recovery

“Social distancing” fully in place

at airports and onboard flights

Only the brave will fly
Need to convince customers that

traveling is safe again

Full border opening
“Social distancing” goes away, but

new sanitary practices in place

Passenger behavioral change

affects business and leisure – but how much?

Recovery speed depends
a) depth of economic recession
b) health of remaining airlines

The longer this phase lasts, the slower the recovery

Now

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ICF proprietary and confidential. Do not copy, distribute, or disclose.

96 100 37 72 88 98 100 103 105 107 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

ICF COVID-19 Global Recovery Forecast Air Passengers, Indexed: 2019 = 100

ICF forecasts traffic to recover in 3-4 years*, but

ur industry’s challenge is overcoming 2020-201

6 Source: ICF analysis

4.8 4.5 6.8 Total Domestic & Intra-Region International Years to recover pre COVID-19 traffic

* Assumes a cure/treatment is widely available in 1Q 2021

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ICF proprietary and confidential. Do not copy, distribute, or disclose.

Aviation has shown resilience in past crises, but this crisis is very different

30 40 50 60 70 80 90 100 110 120 130 1 2 3 4 5 6 7 Recovery from Great Recession (2008/2009) vs. COVID-19 Air Passengers, Indexed: Pre-crisis = 100

Europe USA Rest of World ICF COVID-19

7 Source: ICF analysis, IATA AirportIS

Total activity shutdown
Global scope
Severe economic impact
No China this time
Supply-side constraints
There will be behavioral change

Key differences vs. past shocks

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ICF proprietary and confidential. Do not copy, distribute, or disclose.

This crisis will drive major changes to passenger behavior and industry practices

8 Source: ICF COVID-19 Survey, April 2020

51% 50% 90% 91% 49% 50% 10% 9%

Reduce demand for conferences and other large events? Increase preference for nonstop flights? Faster adoption of video- conferencing for work and education? Passenger scrutiny of health conditions in their destination country?

Yes No 44% 63% 75% 92% 56% 37% 25% 8%

Widespread passenger use

f protective equipment?

Passenger health verification prior to international flights? Sanitary controls at airports, such as passenger temperature screenings? Strict aircraft hygiene controls?

Yes No

Long-term Changes to Passenger Behavior Long-term Changes to Industry Practices

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ICF proprietary and confidential. Do not copy, distribute, or disclose.

This crisis also reinforces prevailing industry Megatrends

Consolidation Big Data Sustainability

COVID-19 impact

n Megatrend

?

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Fewer airlines
Increased pressure on airlines to cut costs
Less long-haul demand, fewer widebodies
More used parts due to early retirements
Airlines seeking more flexibility from

suppliers

What does the “new normal” for Suppliers look like?

In summary, we can expect…

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ICF proprietary and confidential. Do not copy, distribute, or disclose.

Thank you

Carlos Ozores Principal & Americas Consulting Lead +1.917.860.8630 Carlos.Ozores@icf.com

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