Airline industry losses during the COVID-19 pandemic could reach $200 billion, the International Air Transport Association (IATA) estimates.
However, IATA believes there is light at the end of the tunnel and recovery is in sight.
“The magnitude of the COVID-19 crisis for airlines is enormous,” IATA director general Wille Walsh commented on October 4, 2021. “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 industry made net losses of $137.7 billion in 2020, IATA estimated on October 4, 2021. Losses are now expected to reach $51.8 billion in 2021, up from a previous estimate of $47.7 billion made in April 2021. In 2022, net losses are expected to reduce to $11.6 billion.
That means losses are expected to total $201 billion for the 2020-2022 period, before returning to annual profit in 2023.
Demand for air travel is expected to be at 40% of 2019 levels in 2021, rising to 61% of pre-crisis demand in 2022.
Total passenger numbers are expected to reach 2.3 billion in 2021. IATA predicts this will rise to 3.4 billion in 2022, which is similar to 2014 levels. Before the pandemic, passenger numbers reached 4.5 billion in 2019.
Currently, the strongest performing region is North America, helped by a surging domestic market. The region is expected to see a $5.5 billion loss in 2021, followed by a $9.9 billion profit in 2022, the only region for which IATA estimates a profit in 2022.
Cargo is also a bright spot, with revenues expected to rise to a record $175 billion in 2021, before falling slightly to $169 billion in 2022. Demand in 2021 is forecast to be 8% higher than 2019 rising further to 13.2% above 2019 levels in 2022.
IATA is hosting its annual general meeting in Boston, United States from October 3-5, 2021. It is the first time the meeting has been held in person since the pandemic started in 2019.
The association also called for travel rules to be simplified as the world recovers from the pandemic.
“Travel restrictions are a complex and confusing web of rules with very little consistency among them. And there is little evidence to support ongoing border restrictions and the economic havoc they create,” Walsh commented.
At a media briefing during the AGM, Walsh added: “The financial crisis in 2021 is not because of COVID, it’s because of the government restrictions stopping flying.”