GENEVA – The International Air Transport Association is optimistic about 2023 as the strong recovery trend continues in all segments, although the realities still differ between domestic and international, with the former already reaching 2019 traffic levels.
The airlines expect to close 2022 with net losses of USD 6.9 billion, almost USD 3 billion less than in 2021, while by 2023 they are expected to leave the red numbers with net profits of USD 4.7 billion, which represents a margin of 0.6%. This is still far from the $26.4 billion profit made in 2019 with a 3.1% margin.
The data was presented during the IATA Global Media Days, an event in which the organization brings together media from around the world to share the state of the airline industry, and in which Aviacionline is participating. This is the first edition that has been held in person since 2019, prior to the outbreak of the pandemic.
“Resilience has been the hallmark for airlines in the COVID-19 crisis. As we look to 2023, the financial recovery will take shape with a first industry profit since 2019,” said Willie Walsh, IATA Director General.
“That is a great achievement considering the scale of the financial and economic damage caused by government imposed pandemic restrictions.” On this, Walsh also said that the lessons left by COVID, which he now considers endemic, must not be forgotten. “Looking forward, we have to agree with the authorities that the restrictions must be taken based on data,” added Walsh.
Commenting on the expected earnings for the industry, Walsh said that ” a $4.7 billion profit on industry revenues of $779 billion also illustrates that there is much more ground to cover to put the global industry on a solid financial footing”.
Of course, performance varies from region to region. While North America will already return to profit in 2022, Europe and the Middle East will only join it in 2023. But Asia-Pacific, Latin America and Africa will remain in the red with margins of -3.8%, -2.1% and – 1.7% respectively.
In Latin America, airlines will lose USD 2 billion in 2022, a figure that will drop to USD 795 million in 2023. Passenger demand is expected to grow 9.3% while capacity would grow 6.3%. In this way, the demand will reach levels of 95.6% and the capacity of 94.2%.
” Many airlines are sufficiently profitable to attract the capital needed to drive the industry forward as it decarbonizes. But many others are struggling for a variety of reasons. These include onerous regulation, high costs, inconsistent government policies, inefficient infrastructure and a value chain where the rewards of connecting the world are not equitably distributed,” Walsh continued.
In 2022, the industry expects yields to grow by 8.4%, which is almost two percentage points higher than that projected in June. In this way, passenger revenue will grow to USD 438 billion, compared to USD 239 billion in 2021.
Air cargo, highlights IATA, will play a key role in reducing losses with expected revenues of USD 201.4 billion, more than double that of 2019.
The total revenue of the companies will grow by 43.6% in 2022 compared to the previous year, reaching USD 727 billion.
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