The aviation sector today faces many challenges. From geopolitical tensions, to an ongoing US-China trade war, as well as fluctuating oil prices, the sector has seen its fair share of hardships. Still, the aviation sector has found its way of out of the fire.
“The aviation industry has been thoroughly enjoying an extended bull run for the past decade,” KPMG noted in their 2019 Aviation Industry Leaders Report. “Airlines have had access to cheap finance as tough competition pushed down lease rates and debt costs.”
“How long more can this bull run?” KPMG continued. “It has been the question asked for the last number of years. The overall impression heading into 2019 is that while industry fundamentals remain strong – in particular high passenger growth, though cooling, – there are signs that building geopolitical, macroeconomic and industry headwinds will impact the industry over the next 24 months. Varying political tensions and potential trade wars, rising interest rates, volatile oil costs, a strong US dollar, slowing economies, increasing production rates, and MRO and infrastructure capacity constraints are all impacting the aviation sector.”