The International Air Transport Association (IATA) yesterday released its latest outlook for the airline industry’s financial performance showing improved results amid the continuing COVID-19 crisis.
Net industry losses are expected to reduce to $11.6 billion in 2022 after a $51.8 billion loss in 2021 (worsened from the $47.7 billion loss estimated in April). Net 2020 loss estimates have been revised to $137.7 billion (from $126.4 billion). Adding these up, total industry losses in 2020-2022 are expected to reach $201 billion.
In the outlook released on Monday, passenger demand is expected to stand at 40% of 2019 levels for 2021, rising to 61% in 2022.
Total passenger numbers are expected to reach 2.3 billion in 2021. This will grow to 3.4 billion in 2022 which is similar to 2014 levels and significantly below the 4.5 billion travellers of 2019.
According to the outlook, robust demand for air cargo is expected to continue with 2021 demand at 7.9% above 2019 levels, growing to 13.2% above 2019 levels for 2022.
The African carriers will see a very slow pace of recovery in financial performance from a $1.9 billion loss in 2021 to a $1.5 billion loss in 2022.
Low vaccination rates across the continent are expected to severely dampen demand throughout 2022. The slight improvement is built on the expectation of some recovery in intra-Africa travel and travel to some tourist destinations with relatively higher vaccination rates.
IATA’s Director General, Willie Walsh, said “The magnitude of the COVID-19 crisis for airlines is enormous. Over the 2020-2022 period total losses could top $200 billion.
“To survive airlines have dramatically cut costs and adapted their business to whatever opportunities were available. That will see the $137.7 billion loss of 2020 reduce to $52 billion this year. And that will further reduce to $12 billion in 2022. We are well past the deepest point of the crisis. While serious issues remain, the path to recovery is coming into view. Aviation is demonstrating its resilience yet again.”
The air cargo business is performing well, and domestic travel will be near pre-crisis levels in 2022, the IATA predicted.
However, it said the challenge remains in international markets which remain severely depressed as government-imposed restrictions continue.
“People have not lost their desire to travel as we see in solid domestic market resilience. But they are being held back from international travel by restrictions, uncertainty and complexity. More governments are seeing vaccinations as a way out of this crisis.
“We fully agree that vaccinated people should not have their freedom of movement limited in any way. In fact, the freedom to travel is a good incentive for more people to be vaccinated. Governments must work together and do everything in their power to ensure that vaccines are available to anybody who wants them,” said Walsh.