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This industry won't recover from coronavirus until 2023

One vital industry will take years to get back on its feet after the coronavirus recession. (Image: Getty)

While millions of people in Australia are out of work due to Covid-19, one industry in particular has been devastated so much that it will be 2023 before it recovers.

Aviation, which had most of its activity grounded around the world over the last three months, will struggle for years to come, according to a new report from analysis firm Moody's.

The report predicts it will be 2022 before the industry is in recovery, and that's only if the coronavirus has receded. Then it will take another year before "start of return to some form of normality".

About 85 to 95 per cent of 2019 passenger levels is forecast for 2023, but with all airlines carrying the burden of more debt than the pre-coronavirus era.

"The consequences of the coronavirus are likely to reshape the global airline industry," the report read.

"In the first instance, this will be because of a potential reduction in the amount of weaker airlines."

Already in Australia, Qantas' only major rival Virgin Airlines went into voluntary administration in April and is still seeking its white knight. Similar events have also occurred overseas, such as LATAM in South America.

The big money maker for airlines is business travel, but there are doubts that will ever pick up back to old levels.

"Corporate travel will reduce significantly, and perhaps permanently, as a result of changes in working patterns, use of technology and companies' focus on reducing costs. We expect that business travel will only recover slowly."

Moody's had better news for Qantas though, with conditions ripe for it to recover faster than its peers around the world.

This is because Australia and New Zealand's success in repelling Covid-19, the dependence on flying for Australians to cover large distances and Qantas' high proportion of domestic flight revenue. 

"In addition, the resumption of quarantine-free flights between Australia and New Zealand, and Virgin Australia... entering voluntary administration will support Qantas' recovery."

The gloomy outlook for the aviation industry also impacts on the wider economy, especially for sectors like catering, travel agents, tourism, airports, aerospace manufacturing and airline services.

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