General Electric estimated that the recovery of the aviation industry will last two more years, depending on the containment of the Covid-19 pandemic.
Effective inoculation programs and government collaboration to encourage travel, particularly around easing quarantine requirements, will also play a role.
General Electric maintains regular dialogue with airlines and airframe customers about the outlook for commercial air travel, new aircraft production, fleet retirement and aftermarket services, including store visits and parts demand.
Given current trends, the company expects domestic travel routes served primarily by narrow-body aircraft to recover before long-haul international travel routes, which are primarily served by wide-body aircraft.
Aviation
The Covid-19 pandemic continues to have a significant adverse effect on the global airline industry, although the results of General Electric’s Aviation business in 2021 reflect an improvement in market fundamentals.
A key underlying driver of the commercial engine and services business of its Aviation business is global commercial air traffic, which in turn is driven by economic activity and the propensity of consumers and businesses to travel.
Since the start of the pandemic in the first quarter of 2020, General Electric has seen varying levels of recovery in global markets.
Government travel restrictions, public health advisories, people’s propensity to travel, and ongoing cases of the virus have affected the level of air travel.
General Electric regularly tracks global outputs, which for 2021 were about 30% lower than 2019.
Global outflows improved during 2021, up approximately 20% compared to 2020, but levels of recovery varied across regions, largely due to the emergence of variants of the Covid-19 virus.
In regards to the military environment, General Electric continues to forecast strong military demand creating future growth opportunities for its military business unit as the US Department of Defense and foreign governments have continued flight operations and have allocated budgets to upgrade and modernize their existing fleets.
