Profitability is “on the horizon for 2023” for the airline industry, IATA director general Willie Walsh told delegates at the 78th IATA Annual General Meeting here in Doha, Qatar on 20th June.
Walsh announced an upgrade to its outlook for the industry’s 2022 financial performance as the pace of recovery from the Covid-19 crisis quickens. Markets are “rebounding strongly”, with cargo an increasingly “vital contributor,” said Walsh. “It is a time for optimism, even if there are still challenges on costs, particularly fuel, and some lingering restrictions in a few key markets,” he 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%, according to IATA. This will be 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.
Industry-wide profitability in 2023 appears within reach with North America already expected to deliver an $8.8 billion profit in 2022, said IATA. Despite economic challenges, cargo volumes are expected to set a record high of 68.4 million tonnes in 2022.
IATA’s forecast comes despite the huge spike in fuel prices and reflects its conservative view on the timing of the re-opening of China’s borders to international traffic, said Walsh. It also reflects the strong demand being seen by airlines now and that demand is expected to remain for the rest of the year.
Industry revenues are expected to reach $782 billion in 2022 (+54.5% on 2021), 93.3% of 2019 levels. Flights operated in 2022 are expected to total 33.8 million, which is 86.9% of 2019 levels (38.9 million flights).
Passenger revenues are expected to account for $498 billion of industry revenues, more than double the $239 billion generated in 2021. Cargo revenues are expected 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.
Willie Walsh addressing the IATA AGM being held in Doha (photo: IATA).