Summer 2023 to Bring Global Aviation Tailwinds, U.S. and Europe Still to Expect Turbulence

The global airline sector is trending favourably, with financial performance so far in 2023 beating expectations and a strong summer season of earnings coming. However, while relatively better positioned operationally compared with last summer, we expect delays and cancellations to remain higher than normal and to be more volatile in the short term. North America and Europe are expected to experience the most notable disruptions, with the woeful New York airports' performance leaving a mark on the former, while stressed labour relations should buffet the latter. The Asia-Pacific Region seems best prepared to handle surging air travel demand.

“We believe that overall for the summer 2023 air travel season, surging demand will lead to very favourable financial results for global airlines and airports, which ultimately will be supportive of current credit ratings,” said Rohit Kumar, Assistant Vice President, Diversified Industries, DBRS Morningstar. “However, the operational performance in the summer 2023 season will show how far the aviation sector itself needs to travel before claiming to have fully recovered.”

For Aviation Sector steps to improve operational resilience, please refer to the companion piece of this commentary: “Global Aviation Sector Yet to Clear All Runways for Smooth Summer 2023 Travel Season.”