The coronavirus continues to hurt the aviation industry, as travel curbs weigh on corporate and long-haul demand well into 2022 taking the total loss figure to more than $200 billion, as revealed by the industry’s main lobby.
The International Air Transport Association (IATA) in its annual meeting held in Boston on Monday said that the airlines are poised to register a collective deficit of $11.6 billion next year. Interestingly, IATA has also increased its loss estimate for this year and revised upward the shortfall for 2020.
Based on the IATA figures, the combined net losses to the tune of $201 billion during the pandemic eclipses close to nine years of industry earnings.
Although domestic and regional travel is witnessing a gradual rebound, very little recovery is seen in terms of international routes that are crucial to many carriers.
The magnitude of the Covid-19 crisis for airlines is enormous. People have not lost their desire to travel as we see in solid domestic market resilience. But they are being held back from international travel by restrictions, uncertainty and complexity.”~ Willie Walsh, Director General, IATA
Speaking of the losses incurred this year, IATA says the losses will amount to almost $52 billion, which is worse than the $48 billion estimated in April, after flights remained limited through the normally lucrative northern summer.
Last year’s loss was revised to about $138 billion from $126 billion.
Among global regions, only carriers in North America are forecast to return to profit next year, with almost $10 billion in net income followed by the European airlines which are predicted to register about $9.2 billion in losses, and the Mideast operators, highly dependent on intercontinental routes, will rack up a $4.6 billion deficit.
Offering some optimism, Walsh, previously CEO of British Airways owner IAG SA, said the sector is “well past the deepest point of the crisis,” and that “the path to recovery is coming into view.”
Throughout the pandemic, air cargo has acted as a saviour for the industry. The air cargo demand this year is expected to be 8% above 2019 levels, an increase of more than 13% higher in 2022 amid a surge in shipments from a global restocking and the shift to online purchasing.
Walsh highlights that the carriers are going to continue to need wage-support measures from governments until international travel recovers at scale, as well as regulatory steps such as the suspension of use-them or lose-them rules for airport slots.