What is the lost decade of aviation?

The first decade of the 21st Century has been widely regarded as the US airline industry's lost decade. The reasons behind this are easy to see in the wake of the statistics issued by both the US Air Transport Association (ATA) and the International Air Transport Association (IATA).



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Evolution. In 1926 and 1927, there were a total of 24 fatal commercial airline crashes, a further 16 in 1928, and 51 in 1929 (killing 61 people), which remains the worst year on record at an accident rate of about 1 for every 1,000,000 miles (1,600,000 km) flown.

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Staffing shortage
Despite $54 billion of taxpayer funds funneled into airlines to keep them alive during the pandemic, most airlines greatly reduced staff during the first year of the pandemic when air travel, and fares, plunged.

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Over the next 10 years, the worldwide commercial aircraft fleet will grow 3.3% annually from 29,000 to 42,000, notwithstanding the ongoing geopolitical and supply chain challenges impacting Original Equipment Manufacturers (OEM) production rates, according to Alton Aviation Consultancy.

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Aside from the realities of the physics of flight, people will always want to be on the move. Demand for air travel will keep growing in the foreseeable future, according to IATA, whose recent figures show that demand is expected to reach 94% of 2019 levels in 2023 and will increase to 103% in 2024 and 111% in 2025.

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The ICAO attributes the improvements in safety to the safety commitments shared across the industry. In fact, the trend across many years of aviation is that, today, it is safer than ever to fly.

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KLM Flight 4805 and Pan Am Flight 1736, March 27, 1977 This crash remains the deadliest ever, claiming the lives of 583 people when two 747s collided on a foggy runway on the island of Tenerife in the Canary Islands.

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Running since 1929, Hawaiian is among the oldest airlines in the world but, remarkably, it has never suffered a single fatal crash or hull loss.

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Revenue: Industry revenues are expected to reach $803 billion in 2023 (+9.7% on 2022 and -4.1% on 2019). An inventory of 34.4 million flights is expected to be available in 2023 (+24.4% on 2022, -11.5% on 2019). Passenger revenues are expected to reach $546 billion (+27% on 2022, -10% on 2019).

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The airline industry could take years to recover from the coronavirus pandemic, experts say, as it is heavily dependent on how quickly the rest of the economy recovers.

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The average D/E ratio of major companies in the U.S. airline industry was between 5-6x in 2021, which indicates that for every $1 of shareholders' equity, the average company in the industry has more than $5 in total liabilities.

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