Industry association IATA has given a brighter outlook for airlines in terms of profitability for 2022, predicting losses will be less than originally predicted thanks to a faster than expected recovery from the COVID-19 crisis.
IATA now expects the industry to deliver financial losses of $9.7 billion in 2022, an improvement from its previous forecast for a loss of $11.6 billion. Passenger numbers are expected to reach 83% of pre-pandemic levels in 2022, driven by strong pent-up demand and lifting of travel restrictions.
Airline industry losses totaled $42.1 billion in 2021, down from earlier estimates of $52 billion, and $137.7 billion in 2020 when the pandemic effectively grounded airlines worldwide.
The industry may even return to profitability overall in 2023, IATA predicted in its latest industry outlook, which it gave on June 20, 2022, during its annual meeting, being held this year in Doha, Qatar.
“Airlines are resilient. People are flying in ever greater numbers. And cargo is performing well against a backdrop of growing economic uncertainty,” IATA Director General Willie Walsh commented in a statement. “Losses will be cut to $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.”
IATA predicts North America will be the only region returning to profitability this year, supported by the large US domestic market. While the war in Ukraine is disrupting travel patterns in Europe, it is not expected to derail the recovery in that region.
Credit: IATA
In his speech at the meeting in Doha, Walsh also noted current economic challenges, such as rising inflation and energy costs.
“There is no way to sugar coat the bitter economic and political realities we face. But the desire to travel and the necessity of moving goods are both solid,” he declared.
