IATA forecasts better financial recovery for global airline industry
The International Air Transport Association (IATA) has upgraded its outlook for the airline industry’s 2022 financial performance as the pace of recovery from the COVID-19 crisis quickens. 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 percent. That is a huge improvement from losses of $137.7 billion (-36.0 percent net margin) in 2020 and $42.1 billion (-8.3 percent net margin) in 2021.
The global macroeconomic backdrop is critical for the industry outlook. The forecast incorporates an assumption for solid global GDP growth of 3.4 percent in 2022, down from the strong 5.8 percent rebound last year. Inflation has risen and is expected to remain elevated throughout 2022, waning over the course of 2023. And, while nominal interest rates are rising, real interest rates are expected to remain low or negative for a sustained period.
Efficiency gains and improving yields are helping airlines to reduce losses even with rising labour and fuel costs (the latter driven by a +40 percent increase in the world oil price and a widening crack spread this year). Industry-wide optimism and commitment to emissions reductions are evident in the expected net delivery of over 1,200 aircraft in 2022.
Strong pent-up demand, the lifting of travel restrictions in most markets, low unemployment in most countries, and expanded personal savings are fuelling a resurgence in demand that will see passenger numbers reach 83 percent of pre-pandemic levels in 2022.
In the Middle East, this year’s re-opening of international routes and long-haul flights in particular will provide a welcome boost for many. Region-wide, net losses are expected to narrow to $1.9 billion in 2022, from a $4.7 billion loss last year. Demand for revenue passenger kilometres (RPKs) is expected to reach 79.1 percent of pre-crisis (2019) levels, and capacity 80.5 percent.
Despite economic challenges, cargo volumes are expected to set a record high of 68.4 million tonnes in 2022.
