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Aerospace will struggle with the demand uncertainty

Tuesday, July 6, 2021

Significance

Those with a military business have had some respite, but defence budgets are also at risk as governments seek to ease their debt burden, while the recovery of air traffic in 2021 has been very uneven.

Impacts

  • The shift in manufacturing from large wide-body to smaller wide-body commercial aircraft will accelerate.
  • Commercial supply chains will be under pressure to meet projected production rate increases while managing pandemic-incurred debt.
  • Fleet restructuring is likely to see many four-engine passenger aircraft currently stored withdrawn, and older smaller types removed.
  • Pressure will rise to better manage the environmental impact of commercial air travel.
  • Any near-term reduction of government support could see airline bankruptcies increase.

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