Moody’s upgrades outlook for global aviation industry to ‘positive’

Reading Time: < 1 minute

Moody’s has upgraded its outlook for the global airlines industry to “positive” from “negative”, as the ratings agency expects steady vaccine rollouts across geographies to drive a rebound in commercial air travel.

“While the continuing pandemic means there is a risk of further disruption to air travel in various countries at various times, we expect an increase in vaccinations to lower border restrictions and increase demand for air travel over the next 12 to 18 months,” Moody’s said in a note on Tuesday.

In terms of domestic air travel, Moody’s noted that China, the United States and Australia are leading the recovery.

The ratings agency expects the strong recovery in U.S. domestic travel, which began in March, to spread globally over different time-frames.

The US State Department on Monday eased travel advisory ratings for the United Kingdom and Israel after raising both countries to its highest warning level last month.

“The restoration of the ability to travel will relieve the tremendous pent-up demand to fly to visit friends and relatives and for vacations,” it said.

“With offices in many countries opening by fall 2021, this will facilitate the beginning of the corporate travel recovery,” Moody’s added.

Moody’s expects the industry to sustain operating losses and negative operating margins for all of 2021, although to a lesser degree than in 2020.