Willie Walsh, IATA’s Director General, commented: “Airlines are resilient. People are flying in ever greater numbers. Losses will be cut to US$9.7 billion this year and profitability is on the horizon for 2023. It is a time for optimism, even if there are still challenges on costs, particularly fuel, and some lingering restrictions in a few key markets.”
Forecast highlights include:
- Industry losses are expected to reduce to -$9.7 billion (improved from the October 2021 forecast for an $11.6 billion loss) for a net loss margin of -1.2 per cent
- Industry-wide profitability in 2023 appears to be within reach, with North America already expected to deliver an $8.8 billion profit in 2022
- Efficiency gains and improving yields are helping airlines to reduce losses even with rising labour and fuel costs (the latter driven by a 40-per-cent increase in the world oil price and a widening crack spread this year)
- Industry optimism and commitment to emissions reductions are evident in the expected net delivery of over 1,200 aircraft in 2022
- Strong pent-up demand, the lifting of travel restrictions in most markets, low unemployment in most countries, and expanded personal savings are fuelling a resurgence in demand that will see passenger numbers reach 83 per cent of pre-pandemic levels in 2022
- Despite economic challenges, cargo volumes are expected to set a record high of 68.4 million tonnes in 2022.
Revenues are rising as Covid-19 restrictions ease and people return to travel. The challenge for 2022 is to keep costs under control.
“The reduction in losses is the result of hard work to keep costs under control as the industry ramps up,” said Walsh. “The improvement in the financial outlook comes from holding costs to a 44-per-cent increase while revenues increased 55 per cent. As the industry returns to more normal levels of production and with high fuel costs likely to stay for a while, profitability will depend on continued cost control.”