2023 Global Aviation Sector Outlook: Cautious Optimism Follows Another Disquieting Year



Kroll Bond Rating Agency released its outlook on the corporate aviation sector, examining key trends heading into 2023 and discussing various factors that will impact the sector’s gradual recovery.

According to the outlook, KBRA remains optimistic about the gradual but certain recovery in the aviation markets despite another year of upheaval in economies globally in 2022, which was exacerbated by geopolitical tensions. Airlines globally are on the runway to a small net profit of $4.7 billion in 2023, according to International Air Transport Association (IATA) estimates.

Despite strong air travel demand currently, however, obstacles to earnings recovery remain, including the lack of aircraft supply given delivery bottlenecks at major original equipment manufacturers (OEM) and their suppliers. Staff and pilot shortages are also contributing factors to airlines’ challenges in meeting demand, which is critical for returning to healthy profitability, according to KBRA. Meanwhile, aircraft lessors continue to strengthen their balance sheets after a somewhat difficult year in 2022, due to impairments related to the Russia-Ukraine war and generally lower margins because of the time lag between higher funding costs and corresponding lease rate increases in a rising rate environment.

The aviation markets ended 2022 with signs of a recovery, albeit an uneven one, according to KBRA. While interest rates were on the rise, the opening of many borders and recovering airline carriers’ balance sheets provided green shoots for a positive year following the industry downturn of 2020. But Russia’s invasion of Ukraine acted as the catalyst for the fundamental economic weaknesses experienced by global aviation after a decade of expansion.

The report also highlights:

  • KBRA’s outlook on the airline industry’s return to profitability despite the global economy tightening
  • Trends in aircraft leasing markets in the evolving financing environment
  • Capital markets activity as debt raised by airlines and lessors slowed following the record level issuance during 2020 and 2021
  • Aircraft deliveries steady as supply chain issues persist
  • Macroeconomic and geopolitical factors impacting the recovery in air traffic numbers around the world


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