Abu Dhabi, UAEWednesday 28 October 2020

Orders for new aircraft at 10-year low as Covid-19 saps travel demand

Airlines are scaling back their orders for new jets as analysts predict that travel slump could last years

Aircraft orders are at their lowest for ten years. AFP
Aircraft orders are at their lowest for ten years. AFP

Orders for new passenger aircraft fell to their lowest level in a decade as the coronavirus pandemic led to a collapse in global air travel demand, according to new analysis.

Just 19 aircraft were ordered globally in April to June 2020, down 97 per cent from the same period in 2018 when airlines ordered 577 jets, according to UK trade body ADS.

Orders for new jets fell after the first three months as the full scale of the coronavirus’ impact on travel became evident.

However, the backlog of aircraft orders stood at nearly 14,000, providing some optimism for the industry in the event of a strong recovery following the lifting of restrictions, ADS said.

While travel restrictions have eased across many countries, the short-term future of air travel seems bleak. Moody’s Investors Service said this month that demand would not recover to pre-coronavirus levels until the end of 2023, and only if effective medicines were available.

A survey by the International Air Transport Association earlier this month showed that fewer people were willing to fly when the Covid-19 pandemic subsides than there were at the height of movement restrictions in April.

Aircraft manufacturers such as Airbus and Boeing have also axed jobs and cut costs to conserve cash as they forecast a sluggish recovery in travel demand after the pandemic.

“The impact of Covid-19 on international aviation and aerospace is clear to all,” said ADS chief executive Paul Everitt. “The coming months will be challenging for many aerospace businesses as they manage the significant reduction in demand.”

Airline deliveries were also at their lowest point in the 10-year history of the ADS study, with just 94 in the second quarter of 2020.

Last year was also tough for reasons other than Covid-19. Many airlines delayed orders after Boeing grounded its 737 Max aircraft in March 2019 following two deadly crashes that killed 346 people.

Cancellations of plane orders stood at 449 in 2020, a number that would not have a significant effect on the industry, the study said. The majority of the cancellations were due to Boeing’s inability to rectify glitches within the 737 Max rather than Covid-19.

Updated: July 28, 2020 10:20 AM

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