2021 airline revenues to be half of 2019 levels, says Bain

01 March 2021 Consulting.us 1 min. read
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Air travel – in revenue passenger kilometers – is projected to be at 65% of 2019 volumes by the end of the year, according to a January report from strategy firm Bain & Company.

In the firm’s baseline “most likely” scenario, traffic is expected to recover to 47% of 2019 levels by July and 65% by December 2021. Airline revenue would reach $337 billion in 2021 – approximately half of 2019 revenue.

Bain also provided projections for more optimistic and pessimistic scenarios. In the “accelerated vaccine” scenario, distribution of an effective vaccine would occur on a quicker than estimated timeframe. In this scenario, there would be widespread vaccine availability in April, with distribution occurring in phases over 2021. Traffic would recover to 51% of 2019 levels by July, and 77% by year end.

In the worse-than-baseline “drifting” scenario, there would be rolling Covid-19 outbreaks, a global economic recession, and extended travel restrictions throughout 2021. Air travel would reach 39% of 2019 levels in July, and 53.12% in December.

Recovery scenarios for air travel demand
All of Bain’s scenarios registered a worsened outlook in January from the previous month’s projections, owing to Covid spikes, lockdowns, border closures, and vaccine distribution challenges.

Current projections have air travel returning to 2019 levels in April 2023 under the accelerated vaccine timeline. Travel would be at 86% under the baseline scenario and 74% in the drifting scenario in April 2023.

There is some regional variation for projected recovery of air travel. China, which has emerged more quickly and fully from the Covid-19 outbreak which originated within its borders, is slated to reach 90% of 2019 levels in July 2021. Russia and India are expected to reach 77% by July, and Australia is projected to achieve 66%. The US is expected to achieve 57% of 2019 air travel volume in July 2021.