Is there a source for the predicted 4-5 year recovery? I'm curious about viewpoints that counter my view of things, so I'd be interested in reading about that.
To some extent it's my own guess based on how things have developed. Probably somewhat shorter for airlines less exposed to international travel or high dollar business travel. .
It's a great guess--it is also the guess of the IATA, the global trade organization for airlines.
https://www.iata.org/en/pressroom/pr/2020-07-28-02/
To go further on this topic, I am invested in Air Lease. For a number of reasons, they look to come out of this situation in an even stronger position. Check out their earnings call transcripts for more details.
From that article:
"While pent-up demand exists for VFR (visiting friends and relatives) and leisure travel, consumer confidence is weak in the face of concerns over job security and rising unemployment, as well as risks of catching COVID-19"
"The recovery in short haul travel is still expected to happen faster than for long haul travel."
Unemployment fears are a good point: even after a vaccine, people would need to see hiring and stability before they plan vacations. I think rising retail sales suggest a recovery underway, but some job cuts have become permanent. Congress has allowed the paycheck protection program to lapse, so companies might be less able to afford employee salaries, and that could lead to more unemployment.
And one key paragraph I'll quote entirely:
"Meanwhile, since domestic markets are opening ahead of international markets, and because passengers appear to prefer short haul travel in the current environment, RPKs will recover more slowly, with passenger traffic expected to return to 2019 levels in 2024, one year later than previously forecast. Scientific advances in fighting COVID-19 including development of a successful vaccine, could allow a faster recovery. However, at present there appears to be more downside risk than upside to the baseline forecast."
The experts (Dr Fauci, Dr Scott Gottlieb) I've heard view a successful vaccine as likely. IATA seems to be disagreeing with expert opinion when they acknowledge a possible vaccine, but say there is more "downside risk". While either view could be correct, the experts are more likely to be right than the IATA about vaccines.
In the case of a vaccine, IATA doesn't say anything behind a possible "faster recovery". That suggests sooner than 2024, but leaves it entirely unclear when. I wish they hadn't stuck to one predicted outcome, and one year, and provided more information about how a vaccine might speed up the recovery in the airlines industry.