Airlines have recently been seeing an uptick in demand off of COVID-19 pandemic lows, but still plan on a significantly reduced schedule through at least the summer. Delta Air Lines (DAL 0.61%) has said that, even after adding more flights back for July, it expects to have a schedule down 70% compared to July 2019.
With many aircraft moved out of service, maintenance firms and producers of aircraft parts will see a loss of $60 billion in sales this year, according to a Reuters report. The businesses don't expect an improvement any time soon. American Airlines Group (AAL 0.13%), for example, has announced that it is permanently retiring some models and is parking its fleet of Airbus (EADSY 0.02%) A330-200's through at least 2021.
Image source: Getty Images.
Due to lack of demand, airplanes in use for 2021 will be down more than 25% compared to the number in use for 2019, reports Reuters. Less airplanes in use means less need for servicing. As a result, many suppliers will be affected, from a host of small players to big companies like engine maker General Electric (GE -1.66%) and systems firms like Honeywell (HON -0.72%) and Raytheon Technologies (RTX 1.36%).
The report cited industry analyst Richard Aboulafia at aerospace consultancy Teal Group, who estimates a 75% decline in services revenue resulting in $60 billion in lost sales. The International Air Transport Association (IATA) predicted in its latest analysis that airlines will lose $84 billion in 2020. It said that passenger airline revenue would drop by $371 billion in 2020.
