Aviation sector will not see a substantial recovery before 2023: Moody's

Many airlines have improved liquidity but at the cost of rising debt burdens

Air passenger demand globally will remain severely depressed in 2021 and will not see a substantial recovery before 2023, according to Moody's Investors Service.

Health concerns, changes in corporate travel policies, potential restrictions on international arrivals, and lower discretionary spending because of weaker GDP and higher unemployment will constrain air passenger demand into 2022, Moody's said in its credit outlook released on Monday.

Demand in 2023 could approach that of 2019 but the uncertain timing of the coronavirus receding on a more permanent basis makes forecasting a challenge.

Many airlines have improved liquidity but at the cost of rising debt