Airlines to recoup pandemic losses by 2023
18-06-23
With the data delivered at the 79th IATA General Assembly, the sector is expected to return to pre-pandemic figures. However, for Asia Pacific, Latin America and Africa the outlook for the future is not so promising.
The International Air Transport Association (IATA) expects that during 2023 the various airlines will carry 4.35 billion passengers, almost touching the record of 4.54 billion in 2019.
The announcement by the association's director general, Willie Walsh, would be driven by the vigorous resumption of traffic, boosted by the reopening of China, among other factors.
This could result in profits of US$9.8 billion, double IATA's projection, along with total industry revenues of US$803 billion.
"Airline industry profitability expected to strengthen in 2023," IATA said on its Twitter account.
"The return of net profitability is a significant achievement, but with airlines earning only US$2.25 average per passenger, it will continue to be a challenging environment for many," they added.
Profitability at an average of US$2.25 per passenger "is clearly not sustainable, but given that, in 2020, airlines lost US$76 per passenger, the speed of recovery is strong".
Not everyone will experience better figures in the air travel industry
Despite the auspicious figures for North America, Europe and the Middle East, other geographies will not post profits this year.
Asia Pacific will make a loss of US$6.9 billion, Latin America a loss of US$1.4 billion and Africa a loss of US$0.5 billion.
In the case of Latin America, demand is expected to be 2% lower than pre-pandemic and supply 1% below that expressed in 2019.
On the other hand, Africa remains a complex market due to its economic, infrastructure and connectivity challenges, despite which it continues to show solid demand for airline tickets, underpinning the industry's return to profitability.
"Airline financial performances are better than expected. The stronger profitability is driven by several positive developments," the IATA director general noted.
"China lifted COVID-19 restrictions ahead of schedule. Freight earnings remain higher than before the pandemic, although this is not the case at the volume level. And costs are starting to soften. Paraffin prices, which remain high, contracted during the first half of the year," Walsh said.
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