Global airline industry to report loss of $201 billion during 2020-22: IATA

Agencies | Canada

The Daily Tribune – www.newsofbahrain.com

The global airline industry is expected to report a loss of $201 billion during 2020-22, Willie Walsh, Director General, International Air Transport Association (IATA) said in his address at the inaugural session of IATA’s 77th Annual General Meeting, which opened in Boston on Monday.

Net industry losses are expected to reduce to $11 .6 billion in 2022 after a $51.8 billion loss in 2021 (which worsened from the $47.7 billion loss estimated in April).

“Net 2020 loss estimates have been revised to $137.7 billion (from $126.4 billion)," Walsh said adding that the total industry losses in 2020-2022 are expected to reach $201 billion.

The IATA DG said that the passenger numbers are expected to reach 2.3 billion in 2021. "This will grow to 3.4 billion in 2022 which is similar to 2014 levels and significantly below the 4.5 billion travelers in 2019," he said.

Turning his attention to cargo, the IATA DG said that robust demand for air cargo is expected to continue with 2021 demand at 7.9 percent above 2019 levels, growing to 13.2 percent above 2019 levels in 2022.

He added that in 2021 overall demand is expected to reach 40 percent of the pre-crisis (2019) levels. Capacity is expected to increase faster than demand, reaching 50 percent of the pre-crisis levels for 2021. "The average passenger load factor in 2021 is expected to be just 67.1 percent, a level not seen since 1994," he pointed out.

In 2022, overall demand is expected to reach 61 percent of the pre-crisis (2019) levels. Capacity is expected to continue to increase faster than demand, reaching 67 percent of pre-crisis levels in 2022.

Talking about domestic demand, Walsh said with fewer restrictions in most countries is driving the recovery. Global GDP is expected to grow by 5.8 percent in 2021 and a further 4.1 percent in 2022.

Walsh added that in 2021, domestic demand is expected to reach 73 percent of the pre-crisis (2019) levels, while in 2022 domestic demand is expected to reach 93 percent of the pre-crisis (2019) levels.

However, international demand is a different story as it is the slowest to recover owing to continuing restrictions on the freedom of movement across borders, quarantine measures, and traveler uncertainty.

"In 2021 international demand is expected to reach 22 percent of the pre-crisis (2019) levels. Similarly, in 2022 international demand is expected to reach 44 percent of the pre-crisis (2019) levels," Walsh said.

Walsh said that airlines have achieved aggressive cost reductions by reducing their overall expenses by 34 percent in 2021 compared to 2019. "Costs, however, will rise in 2022 and will be only 15 percent lower compared with pre-crisis levels with expanded operations and higher fuel prices," he said.

Asia-Pacific carriers are expected to see their losses reduce from $11.2 billion in 2021 to $2.4 billion in 2022. The region continues to suffer some of the worst travel restrictions. While some restrictions have been removed, no significant improvements are expected in international markets till later in 2022. Reduced losses are expected because of large and largely open domestic markets like China.