Iata forecasts airline losses will fall below $12 billion next year following a worldwide loss of almost $52 billion this year and close to $138 billion in 2020.
Airline association Iata revised up its estimates of global losses last year from $126 billion to $137.7 billion and this year from $47.7 billion to $51.8 billion as members assembled for their annual general meeting in Boston.
A forecast loss of $11.6 billion for 2022 would take Iata’s estimate of airlines’ total losses due to Covid-19 to $201 billion.
The association reported global demand for air travel should end this year at about 40% of 2019’s level and rise to 61% in 2022.
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Iata forecast passenger numbers would reach 2.3 billion this year and 3.4 billion in 2022, on a par with 2014 but significantly below the 2019 total of 4.5 billion air travellers.
However, it reported: “Capacity is expected to increase faster than demand, reaching 50% of pre-crisis levels for 2021 [and] 67% of pre-crisis levels for 2022.”
Domestic demand is driving the recovery and is forecast to reach 73% of pre-2019 levels in 2021 and 93% in 2022.
By contrast, Iata forecast international demand would reach just 22% of 2019 levels this year and 44% in 2022.
Iata director general Willie Walsh noted airlines “have dramatically cut costs and adapted to whatever opportunities were available” and suggested: “We’re well past the deepest point of the crisis.”
But he reported international markets “remain severely depressed”, saying: “People are being held back from international travel by restrictions, uncertainty and complexity.”
Walsh urged governments to do “everything in their power to ensure vaccines are available to anybody who wants them” saying: “The scale of this crisis needs solutions only governments can provide.”
He pointed out government financial support had provided a lifeline for many carriers, but noted “approximately $110 billion needs to be paid back [and], combined with commercial borrowing, the industry is now highly leveraged.
Walsh argued: “Wage support may be necessary for some airlines until governments enable international travel at scale.”
Iata estimates airline revenues will increase to $472 billion this year, similar to 2009, and to $658 billion next year on a par with 2011.
It noted carriers cut expenses by 34% in 2021 compared with 2019, but warned: “Costs will rise in 2022 with expanded operations and higher fuel prices and be only 15% lower [than] pre-crisis levels.”
Iata identified North America as “the strongest performing region” forecasting it would return a collective $9.9 billion in profit in 2022 off the back of the US domestic market, when all other regions would see losses.
It forecast European carriers would see their losses cut from $21 billion in 2021 to just over $9 billion in 2022, with “better coordination between governments expected to see a broader opening of international markets, boosted significantly by the re-establishment of transatlantic travel for vaccinated travellers.
“However, long-haul demand will significantly lag behind the recovery in intra-European travel.”
Iata predicts losses among Asia-Pacific carriers will fall from about $11 billion in 2021 to $2.4 billion in 2022 despite the region continuing to suffer “some of the most draconian travel restrictions”.
It forecasts Middle East carriers will see losses of $6.8 billion this year and $4.6 billion next, airline losses in Latin America will fall from $5.6 billion this year to $3.7 billion in 2022, and African carriers “will see a very slow pace of recovery” due to “low vaccination rates across the continent”.
Iata noted: “Parts of the world with slower vaccine distribution – developing economies and some developed economies in Asia Pacific – will take longer to see an industry recovery. “
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