IATA director general Willie Walsh believes a return to profit across the industry is possible in 2023 after the association cut back its estimate of airline losses for this year to $9.7 billion.
The association had previously projected a loss of $11.6 billion. IATA also now sees the industry having lost around $10 billion less than originally expected in 2021.
Speaking at the opening of IATA’s AGM in Doha today, Walsh said: ”Our industry is now leaner, tougher and nimbler. Our latest analysis shows losses in 2021 close to $42 billion, a huge loss, but down from our earlier estimate of $52 billion. And we now believe that global losses will be cut further, to $9.7 billion this year.”
IATA projects industry revenues will reach $782 billion this year – 93% of pre-crisis levels – and passenger numbers to hit 3.8 billion.
”Industry-wide profit should be on the horizon in 2023,” Walsh says.
Notably IATA still sees North American operators as the only profitable region this year. However, the $8.8 billion net profit forecast for 2022 is $1.1 billion less than it had projected in its previous outlook in October 2021.
IATA’s outlook sees diverging fortunes for European and Asia-Pacific operators. It had previously expected Asia-Pacific carriers, aided by a strong cargo performance, to sharply improve fortunes this year and cut net losses to $2.4 billion. However, amid continued travel restrictions, notably in key market China, it now sees the region’s carriers recording a loss of $8.9 billion this year.
By contrast IATA has improved its outlook for European carriers this year. While it still expects airlines in the region to remain in the red for 2022, a net loss of $3.9 billion is less than half the $9.2 billion it previously forecast.
IATA also expects losses to be lower than it originally anticipated for carriers in Africa, Latin America and the Middle East.
| Region | 2022 (June 22 outlook) | 2022 (October 21 outlook) | Change |
|---|---|---|---|
| Source: IATA outlooks October 2021/June 2022 | |||
| North America | $8.8bn | $9.9bn | ($1.1bn) |
| Africa | ($0.7bn) | ($1.5bn) | $0.8bn |
| Middle East | ($1.9bn) | ($4.6bn) | $2.7bn |
| Latin America | ($3.2bn) | ($3.7bn) | $0.5bn |
| Europe | ($3.9bn) | ($9.2bn) | $5.3bn |
| Asia-Pacific | ($8.9bn) | ($2.4bn) | ($6.5bn) |
| Total | ($9.7bn) | ($11.6bn) | $1.9bn |
”Airlines are resilient. People are flying in ever greater numbers. And cargo is performing well against a backdrop of growing economic uncertainty,” Walsh says. “It is time for optimism, even if there are still challenges on costs, particularly fuel, and some lingering restrictions in a few key markets.”
