Moody’s changes outlook for global aviation industry to positive

Moody’s Investors Service has changed the outlook for the global airline industry to positive from negative as it expects widespread travel to pick up in the second half of this year and accelerate through next year. “We expect this positive demand trend to run for many quarters, into 2023, ” it said on Tuesday, pointing out to rising Covid-19 vaccinations will spur a demand in leisure traffic. It is now using its expectations for growth in travel demand as its key indicator for the passenger airlines industry outlook. However, it also noted its two pre-pandemic indicators, operating margin and change in operating profit dollars, are less insightful about fundamental business conditions at this stage of the pandemic. “We expect the industry to sustain operating losses and negative operating margins for all of 2021, although to a lesser degree than in 2020, ” it said. Moody’s said increasing coronavirus vaccinations around the globe will allow governments to lower barriers to entry for visitors and re-entry for residents returning home.<br/>