Few industries have suffered the economic assault that the pandemic unleashed on the aviation sector. The International Air Transport Association (IATA) estimates that, despite the easing of restrictions and vaccines in 2021, lack of demand from consumers triggered losses of about $52 billion for carriers.

Commercial airlines teetered on the brink of collapse and government support was critical to preventing wider fallout. Over the first three quarters, government aid totalled $243 billion – the bulk from Europe, the US and Asia – as airlines struggled to offset the resurgent impact of covid-19 variants.

North America was the strongest performing market pre-pandemic, and its large domestic base is expected to drive profitability in 2022. Elsewhere, IATA is less optimistic. Europe experienced greater footfall last year, but the region’s aviation sector is more dependent on intra-continental travel and medium- and long-haul international traffic than North America.

Asia-Pacific countries enforced the strictest lockdowns and the region has been slower to distribute vaccines than Europe or North America. However, the strong domestic Chinese market is rebounding and companies there are breaking even. In other regions, including the Middle East, Latin America and Africa, carriers are expected to be loss-making through 2022.

Despite the covid-related headwinds, demand for air travel is gradually returning.

In December, US credit rating agency Fitch Ratings projected global airline traffic to return to 70 percent of 2019 levels in 2022, but warned that that figure still depended on the economic effects of Omicron, as well as future variants.

Fitch explained that the latest strain of the coronavirus will likely prevent global airline traffic fully recovering until end-2023. Already, there have been five distinct variants of concern officially named and further virus mutations are likely to appear, although much depends on the vaccine and booster protection.

The sky’s the limit

But while aviation finances are delicately poised, investors showcased their confidence in the resilience of the sector. In February, a $4.7 billion bid for UK company Signature Aviation from a consortium of Blackstone, Global Infrastructure Partners and Bill Gates’ Cascade Investment Group was accepted.

In April, the Brazilian government revealed it had raised $588 million from the privatisation of 22 airports. This was followed in July by a A$23.6 billion ($17.5 billion; €15.1 billion) take-private bid from an IFM-led consortium called the Sydney Aviation Alliance to acquire Sydney Airport. It was the consortium’s third attempt after the previous bids were judged to undervalue the asset.

Despite the financial downturn, there are still plenty of investors that see the pandemic as a blip.