Amid the continuing COVID-19 crisis, the airline industry expects to lose $ 201 billion for 2020-2022, the International Air Transport Association (IATA) announced when it opened its annual general meeting on Thursday, October 4, 2021.
These are already “improved” projections, with net industry losses expected to decline to $ 11.6 billion in 2022, after a loss of $ 51.8 billion in 2021 (worsened from the loss of $ 47.7 billion estimated in April).
“The scale of the COVID-19 crisis for airlines is enormous. Over the period 2020-2022, total losses could reach 200 billion dollars, ”reiterated IATA Director General Willie Walsh.
“In order to survive, airlines have significantly reduced their costs and adapted their operations to all available opportunities. This will see the 2020 loss of $ 137.7 billion reduced to $ 52 billion this year. And that will further reduce to $ 12 billion in 2022, ”he explained.
However, “We are well past the deepest point of the crisis,” reassured Walsh. “Although serious problems remain, the road to recovery is emerging. Aviation is once again demonstrating its resilience.
Global passenger demand (measured in RPK) is expected to be 40% of 2019 levels for 2021, reaching 61% in 2022.
The total number of passengers is expected to reach 2.3 billion in 2021. This figure will rise to 3.4 billion in 2022, which is similar to 2014 levels and significantly lower than the 4.5 billion travelers in 2019.
Strong air freight demand is expected to continue with demand in 2021 at 7.9% above 2019 levels, rising to 13.2% above 2019 levels for 2022.
The air freight business is doing well and domestic travel will be close to pre-crisis levels in 2022, IATA said.
The challenge lies in international markets which remain severely depressed as government restrictions continue.
“People have not lost their desire to travel as we see in the strong resilience of the internal market,” said the IATA Managing Director.
“But they are prevented from traveling abroad by restrictions, uncertainty and complexity.”
Domestic demand, with fewer restrictions in most countries, is driving the recovery. This year, domestic demand is expected to reach 73% of pre-crisis (2019) levels.
By 2022, domestic demand is expected to reach 93% of pre-crisis levels (2019).
International demand is the slowest to recover due to continued restrictions on free movement across borders, quarantine measures and uncertainty among travelers.
By 2021, international demand is expected to reach 22% of pre-crisis levels (2019).
By 2022, international demand is expected to reach 44% of pre-crisis levels (2019).
Freight demand (measured in CTK) is strong as companies continue to resupply. The World Trade Organization forecasts world trade growth of 9.5% in 2021 and 5.6% in 2022.
In 2021, freight demand is expected to exceed pre-crisis levels by 8% (2019). By 2022, freight demand is expected to exceed pre-crisis levels by 13% (2019).
Overall revenues in 2021 are expected to increase 26.7% from 2020 to $ 472 billion (similar to 2009 levels).
Further growth of 39.3% in 2022 will bring industry revenue to $ 658 billion (similar to 2011 levels).
Passenger activity will contribute $ 227 billion to industry revenues in 2021, reaching $ 378 billion in 2022.
Passenger yields decreased each year between 2012 and 2020. In 2021, yields are expected to increase by 2.0% and a further 10% in 2022.
Freight revenues are expected to hit a record $ 175 billion in 2021 and a similar $ 169 billion forecast in 2022.
Freight yields are expected to increase by 15% in 2021 but decline by 8% in 2022.
Airlines have achieved aggressive cost cuts having reduced their overall spend by 34% in 2021 compared to 2019.
Nonetheless, costs will increase in 2022 and be only 15% lower than pre-crisis levels with expanded operations and higher fuel prices.
All regions will improve their collective financial performance compared to 2020, IATA predicted.
The best performing region is North America, which is expected to lose $ 5.5 billion this year but post profits of $ 9.9 billion in 2022.
All other regions will see their losses reduced in 2022 compared to 2021.
Asia-Pacific carriers are expected to see their losses drop from $ 11.2 billion in 2021 to $ 2.4 billion in 2022.
The region continues to suffer from some of the most draconian travel restrictions.
Although there has been some easing of restrictions, significant improvements in international markets are not expected until the end of 2022.
Reduced losses are expected to be achieved through large and widely open domestic markets, not the least of which is China.
The region’s carriers also benefit disproportionately from the strength of the air cargo markets in which they dominate.
Middle Eastern carriers will see very limited improvement in their financial performance, going from a loss of $ 6.8 billion in 2021 to a loss of $ 4.6 billion in 2022.
Without large domestic markets, the region’s major carriers rely heavily on connecting traffic, particularly to Asia-Pacific which has been slow to reopen to international traffic.
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