European aerospace companies face multiple challenges to recover from the largest recession in industry history in 2020, says message Fitch Raitings.
Companies that are heavily involved with commercial aerospace segments are likely to face the slowest recovery, and in some cases, their revenues will not return to 2019 levels until 2024, ”the agency noted.
Fitch noted that in 2020 the agency revised the ratings of thirteen aerospace and defense companies in the EMEA region (Europe, Middle East and Africa). All of the seriously downgraded companies - Airbus SE, Rolls-Royce and Aernnova - are heavily influenced by the large commercial aircraft segment, whose weak performance was the main reason for the downgrade.
Analysts expect an increase in high-capacity passenger aircraft shipments in 2021, but this is likely to be in the single-digit percentage range, as confidence in the aviation sector remains low amid the threat of stricter restrictions and passenger reluctance to fly. This uncertainty about the commercial aerospace industry is partly offset by improved visibility for the defense sector, where government spending is likely to remain stable in the short to medium term.