Coface, risks decreasing for the aviation sector

The full flights departing from Italian airports are an indicator, but not the only one. All over the world the aviation sector is taking offaccomplice the resumption of travel after the limits dictated by the pandemic emergency. IATA, the global association of sector players, reports that in May travel reached just four points from the levels of May 2019, with domestic travel reaching new records. In this scenario it is not surprising the decision of Coface (credit insurance) to reclassify companies in the sector upwards.

Tourism is picking up

The reclassifications are of particular interest Western Europe, Middle East And Japan and are mostly related to the consequences of the reopening of the China, the recovery of tourism as well as the impact of some public policies (eg rail traffic in Germany). Even if, analysts warn, the risks remain high due to high energy costs and stagnant global demand. In short, we are navigating on sight, also waiting to understand what will happen to fuel prices in the months to come, that is, if there will be a new surge like the one that started at the end of summer 2022, or if instead the situation will remain under control.

In the transport sector, the airline segment was most affected by the pandemic crisis and consequently recorded the most dynamic recovery, but the gradual reopening of economies starting in the second half of 2021 has changed that. The reopening of the Chinese (early 2023) and Japanese (late 2022) borders, accompanied by a relaxation of travel restrictions for international tourists (spring 2023), were two key elements. “The number of commercial flights has also increased and is now above its pre-Covid level, although the occupancy rate on aircraft remains lower,” Coface points out. “In Western Europe and the United States, Airbus and Boeing have seen a recovery in net aircraft orders, standing at 774 for Boeing and 820 for Airbus respectively in 2022; further important orders were recorded during the Bourget show, including 500 A320s from Air IndiGo and 250 Airbus and 220 Boeings from Air India. This dynamism of the aeronautical industry has clearly favored reclassification in some countries, such as France”, reads the study.

The environmental variable

Beyond the current situation, analysts also considered the impact of the environmental transition, which “on the one hand pushes manufacturers to innovate to produce clean aircraft and on the other leads airlines to renew their fleets to have aircraft with lower energy consumption”. Although polluting, the aircraft industry is among the most active in terms of decarbonisation and this reduces medium-term systemic risks.