The International Air Transport Association projects the global airline industry to post a 2022 net loss but in 2023 return to profitability for the first time since 2019, the association announced Tuesday.
IATA projects airlines in 2022 will lose $6.9 billion, an upgrade over its June forecast of $9.7 billion. It also is an improvement over losses of $42 billion in 2021 and $137.7 billion in 2020. Revenue is forecast to increase 43.6 percent year over year to $727 billion. IATA projects a 2023 profit of $4.7 billion on revenue of $779 billion.
"Resilience has been the hallmark for airlines in the Covid-19 crisis," IATA director general Willie Walsh said in a statement. "As we look to 2023, the financial recovery will take shape with a first industry profit since 2019. That is a great achievement considering the scale of the financial and economic damage caused by government-imposed pandemic restrictions."
2022 passenger revenues are forecast to grow to $438 billion, up from $239 billion in 2021, according to IATA. Anticipated passenger traffic recovery is 70.6 percent of 2019 levels, down from the 82.4 percent anticipated in June, led by a downgrade of gross domestic product growth expectations and delays in removing Covid restrictions in several markets, particularly China.
IATA expects 2023 passenger revenue to be $522 billion, with passenger demand to reach 85.5 percent of 2019 levels. The projected passenger count of 4.2 billion would surpass 4 billion for the first time since 2019.
"The expected profits for 2023 are razor thin," Walsh said. "But it is incredibly significant that we have turned the corner to profitability."
North America is the only region projected to post a profit in 2022, with Europe and the Middle East expected to join it in 2023, according to IATA, which anticipates North American carriers to record $9.9 billion in profit in 2022 and $11.4 billion in 2023, with 2023 passenger demand growth of 6.4 percent, outpacing capacity growth of 5.5 percent.
The projected loss for European carriers in 2022 is $3.1 billion, with an anticipated profit of $621 million in 2023. Demand for the region in 2023 is projected to reach 88.9 percent of 2019 levels with capacity 89.1 percent recovered.
In the Middle East, IATA projects a 2022 loss of $1.1 billion and a 2023 profit of $268 million. Demand in 2023 is expected to recover to 97.8 percent of pre-pandemic levels, with capacity at 94.5 percent. The region has benefitted from some rerouting because of the war in Ukraine as well as from pent-up travel demand, according to IATA.
The expected loss for Latin American carriers is $2 billion in 2022 and $795 million in 2023. IATA projects next year's demand will be 95.6 percent recovered with capacity at 94.2 percent of 2019 levels.
IATA projects the biggest losses for Asia-Pacific, at $10 billion in 2022 and $6.6 billion in 2023, citing China's zero-Covid policies' impact on travel, "The region's losses are largely skewed by the performance of China's airlines who face the full impact of this policy in both domestic and international markets," according to IATA. Still, IATA expects strong pent-up demand to assist in a rebound.