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The International Air Transport Association expects the airline industry to return to profitability by next year as pent-up demand for travel sustains bookings. IATA's Director General Willie Walsh in the 78th annual general meeting in Doha stated airlines have emerged as “leaner, tougher and nimble."
Walsh said the airline industry survived, "defying predictions of bankruptcies and failures. It certainly helped that prior to the crisis, the industry’s financial foundations were at their strongest point ever, owing to your leadership."
Walsh told the gathering of airline chiefs, "Aviation is resilient. And we are rebounding." Adding he said, "By next year, most markets should see traffic reach or exceed pre-pandemic levels."
In the AGM, he further said, "Air cargo stood out as a lifeline for vaccines, supply chains, and airline revenues throughout the COVID-19 crisis. And it has grown to be an even more vital contributor to revenues."
According to Walsh, the airline industry is "now leaner, tougher, and nimbler".
Walsh cited IATA's latest analysis which shows that losses in 2021 were close to $42 billion, a huge loss, but down from its earlier estimate of $52 billion. He said, "And we now believe that global losses will be cut further, to $9.7 billion this year."
"Industry-wide profit should be on the horizon in 2023," Walsh said.
Further, Walsh said, "In a few days, Doha will become the aviation capital of the world. The last time we met in Doha, in 2014, we were celebrating the 100th anniversary of the first airline flight. This year’s AGM is another momentous occasion: Airlines are simultaneously recovering from the COVID-19 crisis, setting the path to achieving net-zero carbon emissions by 2050, working to improve gender diversity, and adapting to a geopolitical environment that is undergoing its greatest shock in over three decades."
In the outlook for the airline industry for 2022, IATA said 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%. That is a huge improvement from losses of $137.7 billion (-36.0% net margin) in 2020 and $42.1 billion (-8.3% net margin) in 2021.
Further, IATA stated that industry-wide profitability in 2023 appears within reach with North America already expected to deliver an $8.8 billion profit in 2022.
According to IATA, strong pent-up demand, the lifting of travel restrictions in most markets, low unemployment in most countries, and expanded personal savings are fueling a resurgence in demand that will see passenger numbers reach 83% of pre-pandemic levels in 2022.
Passenger revenues are expected to account for $498 billion of industry revenues, more than double the $239 billion generated in 2021, IATA stated.
Further, IATA expects cargo revenues to account for $191 billion of industry revenues. That is down slightly from the $204 billion recorded in 2021, but nearly double the $100 billion achieved in 2019. Overall, the industry is expected to carry over 68 million tonnes of cargo in 2022, which is a record high.