Written by Nigel Orme
Undoubtedly the global aviation sector has been one of the hardest hit by the Covid pandemic however, things are finally starting to look up after more than a year of doom and gloom.
The industry went from an absolute boom in 2019, which included unprecedented needs for new pilots and pilot training, to almost a complete grounding of most passenger aircraft. Many are now asking, what does 2021 and beyond look for the aviation market, when will the bounce back occur and what does the future of our beloved industry look like?
Depending on who you talk to you, opinions seem to vary. This article/report will help to pull more of the hard data and statistics from the airlines, OEM’s, AOC’s and ATO’s to give a more robust and fuller picture of the future of aviation. a
Objectivity and Transparency As the author of this article, it is important to note that I am an investor and Director in several aviation and non-aviation related companies. In addition, I provide expert opinion to large global investment firms on behalf of Gerson Lehrman Group as in an independent consultant and advisor.
That is worth mentioning as some will question the potential subjective nature of airline and OEM executives when they discuss recovery and rebound plans along with what the future picture of aviation looks like.
The reason for pulling many diverse articles and statistics from a variety of sources in this report is to be able to add an objective and balanced narrative on where many of us see the global aviation market in the coming years.
Articles of relevance There will be several direct article links in this report across civil and business aviation which address pilot demand, training, crew resourcing, aircraft ordering, etc.
The goal is to give you not only my opinion but that of many industry experts, providing you with the ability to access and read these articles yourself. This will help all that read this article to have a better overall view and summary of where our industry is heading.
How we reflect and evaluate Historical data This is an important subject area as the aviation sector has had many ups and downs over the last 100 years. However, what we have consistently seen is that after a major event such as 9/11 or the last economic recession which had serious negative implications for aviation, the industry has always bounced back bigger and stronger.
Graphs are of interest in this article showing historic growth of aviation following a major downturn in the economy: Facts and Figures (icao.int)
Passenger demand and growth 2006-2021 (note that Statista has some excellent data, but you may have to sign up for free access to view the first few free graphs) Growth of global air traffic passenger demand 2006-2021 | Statista
Pre-pandemic Without question the aviation sector, specifically for pilot training, was experiencing quite a boom up until to 2019. The pilot shortage was upon us and flight schools were full to capacity. Several big start-ups followed the sale of CTC to L3 and Harris including Skyborne and Leading Edge.
There was heavy investment into CAE (industry leader in pilot training) and all academy and airline cadet programs were in full swing.
Significant demand for new pilots through 2019: How the aviation industry is addressing the pilot shortage - Aviation Business News (December 2019) Boeing CEO says global pilot shortage is one of the biggest challenges (cnbc.com)
Current State of Play-Impact of Covid on the Airlines and General Aviation 2020 saw redundancies, retirement and refocus of individual careers that have been prevalent during the pandemic but add to the argument on how this will escalate the future pilot shortage.
Many pilots have made the decision to retire early, whilst other have been made redundant and used the timing to refocus on other non-flying careers.
FlightLogger | Study: Early retirements create unique pilot career opportunities - go with the right flight school Older pilots face decisions on early retirement offers – Financial News Nearly 2,000 Delta Pilots Have Chosen to Retire Early as Talks Continue to Avoid Involuntary Furloughs (paddleyourownkanoo.com)
Current Recovery markets As of May 2021, the vaccine roll-out has meant we are starting to see many markets start to recover as travel picks back up. With the US and Asia leading the way, UK/Europe has been sluggish and cautious. However, with the May 17 reopening date for international travel drawing near there seems to be significant pent-up demand to get back in the skies.
UK/Europe EasyJet sees more flying from late May (ampproject.org) Ryanair to increase flights to 80% of pre-pandemic levels by July | Ryanair | The Guardian (ampproject.org) Etihad CEO: Pent-up demand is like a ‘fire hydrant’ waiting to go off - Airlines, Etihad Airways, Tony Douglas - Aviation Business Middle East (aviationbusinessme.com)
Asia-Australasia Jetstar announces hiring spree and bigger domestic planes (ampproject.org) Hundreds of aviation workers return to work as trans-Tasman bubble takes off | The Australian AirAsia Group airlines anticipate strong recovery in 2Q | CAPA (centreforaviation.com)
Business Aviation We cannot forget the huge market within business aviation, and they add to the global pilot numbers needed in the years to come. This sector has done much better than the commercial side during the pandemic and is also expected to grow once the industry bounces back.
Many people that can afford it much prefer this route of travel and continued to travel during the pandemic.
Rebound and opportunity in 2021-22 Although very few expect a full rebound this year there is growing optimism about what the state of aviation will be in the next few years. Many investors are seeing this as a significant opportunity to get into the market now with the knowledge and success of vaccine programs in various countries as well as the historical data about how aviation grows after global downturns.
More Than 90 New Airlines Are Launching in 2021. They Say It’s the Perfect Time. - WSJ (ampproject.org) American sees aviation rebound ‘accelerating’ | News | Flight Global Room To Grow: Delta Air Lines Flying 90% Of Fleet But Underutilizing It - Simple Flying (ampproject.org) United Airlines tells staff it’s hiring hundreds of pilots for travel recovery (ampproject.org)
Future Pilot demand and numbers The big question for all of us is what the future demand looks like and how many aircraft and pilots will we need. Many of these articles put some hard numbers on that recovery.
After Covid-19, Aviation Faces a Pilot Shortage (oliverwyman.com) Aviation industry to face post-pandemic pilot shortage, study shows (cnbc.com) Travel during Covid: As flight demand recovers, airlines revive pilot hiring (ampproject.org) Middle East pilot shortage on the horizon, warns aviation expert - Airlines, Pilot Shortage, Airline Pilot - Aviation Business Middle East (ampproject.org) Delta Canceled 100 Flights Over Weekend in Worrisome Trend (ampproject.org)
Alaska Airlines recalls more than 400 pilots as it readies for travel surge later this year - Puget Sound Business Journal (bizjournals.com) Pilot Shortage Threatens Airline Recovery - AVweb (could be a shortage of 50,000 pilots globally by 2025) Report predicts global pilot shortage as airline industry recovers | KSTP.com (estimates 34,000 pilot shortage by 2025) The pilot shortage - statistics & facts | Statista (excellent pre and post pandemic statistics on air travel, airlines and pilot demands)
Future considerations An important factor to consider is what the orders look like for Boeing and Airbus plus business aviation. Aircraft orders came to a standstill in 2020 but now there is a strong surge as the airlines have more confidence in the recovery and growth coming in the next few years.
Airbus deliveries surge in March, sending shares higher | Reuters Southwest Airlines orders 255 Boeing 737 MAX aircraft (aerotime.aero) United, predicting a rebound in travel, buys 25 Boeing 737 Max jets (msn.com) VistaJet to add over a billion dollars in new Globals, Challengers (privatejetcardcomparisons. com) Excellent pilot numbers and statistics put out by Boeing: Boeing: Commercial Pilot, Civil Pilot, Aviation Technician & Cabin Crew Demand Outlook (forecast for 2020-2039 from Boeing)
CAE acquisitiom CAE is the largest global company providing pilot training across all sectors. They are seen as an indicator across the global market on what is going on with the pilot training industry. Their acquisitions over the last year send a very clear message on where they see the opportunity to grow their market share now in anticipation of what they view as huge growth following the bounce back from the pandemic. Many investment firms are very interested to watch what they are doing and advise their clients based on that information.
CAE Merlot acquisition
CAE Bombardier acquisition
CAE TRU simulation acquisition
Summary There are many opinions out there right now but if we take a ‘high level’ view of all the data and research that has been done, coupled with the clear trends we are seeing in some parts of the world, it is my conclusion that there is some significant opportunity in being optimistic about the future of aviation.
It will continue to be a bumpy year in 2021 but when you combine the historical data with the current data, it is safe to say the global aviation market will continue to grow and expand its aircraft and pilot numbers in the years to come. The prediction that globally there may be a pilot shortage of over 30,000 by 2025 is not that far-fetched.
Also, if there is one thing we know about people in aviation, they love a challenge and they know how to work towards achieving their goals and dreams! Aviation is coming back.
About the Author - Nigel Orme MRAeS FCMI Spending over a decade in blue light services early in his career, Nigel worked as both a Flight Paramedic and Special Operations Police Officer before transitioning into aviation securing both his helicopter and airplane commercial pilot’s license.
After working around the world as a pilot and training captain on a number of different aircraft, Nigel went to work for CAE . Focused first as the EMEA airline partnership manager based in Oxford, UK before moving into the EMEAA Head of Sales role for business aviation and helicopter pilot training.
Following a series of C-level positions around the US and Europe, Nigel founded the StratStep Group that is comprised of aviation, consulting and technology divisions working with many global FTSE and SME aviation companies. More recently he founded the Global Pilot Training Alliance and Colossal Motion Limited which is tailored to specialised marketing within the aviation sector.
Nigel currently serves as the Director of Strategy for Aeros Group and Managing Director/ Accountable Manger for Cat3C both based in the UK.
Disclaimer This is a personal blog/article. Any views or opinions represented in this blog/article are personal and belong solely to Nigel Orme and do not represent those of people, institutions or organisations that Nigel Orme may or may not be associated with in a personal or professional capacity unless explicitly stated. Any views or opinions are not intended to malign any religion, ethnic group, club, organisation, compa- ny or individual. All content is for informational purposes only and no liability will be held for any errors, omissions, losses or damages from the display or use of this information.