The International Air Transport Association (IATA) expected the aviation sector to reduce losses this year and return to profitability in 2023, against the background of the increase in the number of passengers, two and a half years post the Corona pandemic, which caused major losses in the transport sector.
In a report issued on the sidelines of its annual meetings in Doha, the federation indicated that the sector is still expected to lose $9.7 billion cumulatively this year, but it will be a “tremendous improvement” after losing $137.7 billion in 2020 and $42.1 billion in 2021.
And the union saw in its report that “profitability at the sector level in 2023 appears within reach, with expectations that (airlines) in North America will achieve profits of $8.8 billion in 2022.
More than 1,200 aircraft are expected to be delivered in 2022, while cargo volumes are expected to reach a record 68.4 million tons “despite the economic challenges”.
According to the report, “increasing latent demand, the lifting of travel restrictions in most markets, and the decrease in the unemployment rate in most countries (…) is fueling the return of demand, which will see the proportion of travelers reach 83 percent of pre-pandemic levels.”
The crisis, which is the largest in the history of commercial aviation, caused airlines to lose 60 percent of their customers in 2020, and the occupancy rate increased in 2021 to only 50 percent, causing total losses of nearly $200 billion over the two years, according to the Union.
In terms of turnover, airline companies expect to return in 2022 to 93.3 percent of 2019 levels, to reach $782 billion, a jump of 54.5 percent within one year.
This increase will be supported by revenue from passenger transport, which will more than double within one year to reach $498 billion, while freight revenue will decrease slightly to $191 billion from $204 billion in the previous year, according to the report.
Despite the continuing spread of the epidemic and some travel restrictions, particularly in Asia, the sector is recovering.
Russia’s invasion of Ukraine and sanctions against Moscow have caused oil and gas prices to soar, and the union said fuel would represent about 24 percent of airline costs in 2022, compared to 19 percent in 2021.