The airline industry is set to reduce its overall global losses to $9.7 billion this year, although some regions such as North America may return to profit during 2022.
The latest industry outlook by airline association IATA said that the sector’s predicted loss in 2022 would be a “huge improvement” on the losses of $137.7 billion in 2020 and $42.1 billion in 2021 when services were heavily curtailed due to the Covid-19 pandemic.
IATA, which is holding its annual general meeting in Doha this week, added that the sector’s return to profitability “appears within reach” in 2023, while North American carriers are set to make a $8.8 billion profit in 2022, despite the rising cost of aviation fuel.
Airlines have benefited from “strong pent-up demand” this year, with passenger numbers expected to recover to 83 per cent of pre-Covid 2019 levels and revenue more than doubling from $239 billion in 2021 to $498 billion this year.
Willie Walsh, IATA’s director general, said: “Airlines are resilient. People are flying in ever greater numbers. 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.
“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. That encompasses the value chain - our suppliers, including airports and air navigation service providers, need to be as focused on controlling costs as their customers to support the industry’s recovery.”
IATA added that the war in Ukraine would “continue to disrupt travel patterns within Europe and between Europe and Asia-Pacific”.
“However, the war is not expected to derail the travel recovery, with the region edging closer to profitability in 2022, with a net loss of $3.9 billion forecast. Demand is expected to reach 82.7 per cent of pre-crisis levels and capacity 90 per cent,” added the IATA in its forecast.