Aviation sector set for surge in merger & acquisition deals amid Covid crisis - PwC

A surge in merger and acquisition activity in the aviation sector are expected in the months ahead and more airline collapses are likely. That is among the findings contained in PwC's Aviation Industry Outlook for 2021, which also envisages that airlines will need ongoing access to emergency liquidity, including government support, for the foreseeable future. The report finds that extensive government support already provided, estimated to be at least $180b, has played a major role in saving a number of weak carriers from collapse. However, in doing so "a long-term un-levelling of the playing field" has been introduced, the report concludes. According to the data analysis firm, Cirium, more than 40 airlines went out of business in 2020. That the figure would have been much higher without the injection of government support which has kept many airlines afloat. The PwC report says record numbers of investors are "lining up" in anticipation of finding real value in distressed aviation-related transactions, arguably for the first time in over a decade. "Capital should be available in scale as the recovery trajectory becomes better defined," the report concludes.<br/>