As of Sep 05th, 2021
Unsurprisingly, the aviation industry was tremendously affected by the COVID-19 pandemic. Tourism and business travel practically disappeared by the second quarter of 2020 with a few small one-off improvements in the summer of 2020 followed by yet another global stoppage of air travel until mid-year 2021. However, since the middle of 2021, a glimmer of hope for the aviation market has emerged. The increase in the number of vaccinated people around the world has allowed for a cautious resumption of aviation.
Certainly, with many planes out of action and some even prematurely retired, it was not only the airlines that felt the devastating impact of the pandemic, but also the airline manufacturing companies. Firm orders for new aircraft either ended up being delayed and/or cancelled, directly affecting the financial health of large companies such as Airbus, Boeing and Embraer. In 2020 alone, these companies have accumulated billions of dollars in losses and up to 50% of new aircraft production cuts. For example, Mitsubishi Aircraft Corporation was counting on the development of the SpaceJet M90. Despite the SpaceJet M90 already having firm orders, several problems and delays in certification made worse by the pandemic resulted in the eventual suspension of the program and in the process eliminating thousands of jobs at the end of 2020.
The chart below shows how the two largest aircraft manufacturers had their new aircraft deliveries affected within the first few months of the pandemic. In 2019, Boeing had already suffered a production drop due to the recertification of the Boeing 737-Max and in 2020, saw its production numbers drop even further after the start of the pandemic.
Figure 01 – Airbus and Boeing Deliveries impacts from Covid-19
Below, we will examine how the three largest commercial aviation manufacturers, Airbus, Boeing and Embraer were doing before the pandemic, how they were affected and what are the prospects for recovery and growth. Also, we will be looking at how these manufacturers are performing in the Asian market.