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Update: What Would a Recession Mean for Aviation?

As talk increases about an economic downturn, two economists weigh in on possible impacts for the industry.

Demand for air travel is up, but how would a recession affect things? [File photo: Adobe Stock]
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Key Takeaways:

  • The Federal Reserve, led by Chairman Jerome Powell, is attempting a "soft landing" for the U.S. economy by aggressively raising interest rates to combat high inflation driven by strong consumer demand and supply chain issues.
  • This strategy carries a significant risk of causing a recession and higher unemployment, a scenario economists increasingly view as highly probable, making a soft landing "very challenging."
  • While commercial airlines currently benefit from strong travel demand and a pilot shortage, other aviation sectors like business aviation and flight schools face challenges from increased costs and harder access to credit, which could slow growth and exacerbate the pilot workforce shortage.
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Jerome Powell, the chairman of the Federal Reserve, is not a pilot, but he started talking like one when the economy began to nosedive earlier this year. 

Specifically, Powell said he would try to “land the plane softly,” and that “plane” is the U.S. economy. It’s the biggest economy in the world, and with more than 329 million passengers on board, a lot is at stake because unless he sticks that landing, the effects—and an economic ground stop—could be felt worldwide. 

Michael Wildes

Michael Wildes holds a master’s degree in Logistics & Supply Chain Management, and a bachelor’s degree in Aeronautical Science, both from Embry-Riddle Aeronautical University. Previously, he worked at the university’s flight department as a Flight Check Airman, Assistant Training Manager, and Quality Assurance Mentor. He holds MEI, CFI & CFII ratings. Follow Michael on Twitter @Captainwildes.

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