Airlines are now expected to lose $51.8 billion this year, remain in the red as an industry next year and rack up collective losses of over $200 million between 2020 and 2022, IATA’s latest economic forecast shows.
The airline trade association disclosed its latest economic outlook at its AGM, which is being held in Boston today. The loss forecast of $51.8 billion for 2021 marks a $4.1 billion deepening of its previous projection from April for industry losses for the year.
IATA net result/forecast by region (2019-2022)
IATA also added a further $11 billion to losses for 2020, which now total $137.7 billion.
Notably, it also projects the industry will remain in the red next year, though it expects this to be cut to $11.6 billion.
It means IATA now does not see the industry returning to profit before 2023.
IATA director general Willie Walsh says: ”We are also seeing improvements in finances. We expect 2021 losses to be nearly $52 billion – cut dramatically from the $138 billion lost in 2020. Losses will further reduce in 2022 – to about $12 billion.”
But he adds: “In total, the Covid-19 crisis will cost aviation $201 billion in losses before we return to profitability in 2023.”
The loss is based on passenger demand reaching only 40% of pre-crisis levels this year and rising to still only be 61% of 2019 levels in 2022.
While IATA sees the industry increasing passenger numbers by around 50% from this year to next, its projected 3.4 billion passenger figure is the equivalent of 2014 levels and some way short of the 4.5 billion airlines carried in 2019.
IATA sees North American carriers driving the industry recovery, in part because of their strong domestic market and further aided by the opening up of many international markets to travel next month.
”The US industry started to turn cash-positive in the second quarter of 2021 and will be the only region in positive financial territory in 2022 with an expected $9.9 billion profit,” IATA says. This compares to a loss of $5.5 billion this year.
European carriers are expected to lose the most money of all regions this year at $20.9 billion. Those losses are expected to roughly halve to $9.2 billion in 2022.
Asia-Pacific operators, which are seen losing $11.2 billion this year, are expected to cut losses to $2.4 billion in 2022.
Walsh adds: ”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.”