An industry-wide return to profitability, for the aviation sector, should be “on the horizon” next year, while losses will further decline this year, the head of the International Air Transport Association (IATA) has said.
In his address to the industry group’s annual general meeting in Doha, Qatar, IATA director general Willie Walsh said the airline industry’s combined losses are expected to be slashed this year, with a return to profitability for the industry likely to be more visible in 2023.
IATA’s own analysis suggests combined losses of nearly $42bn for the airline industry for 2021. While still huge, that figure is considerably lower than the group’s previous estimate of around $52bn.
Furthermore, IATA now believes global losses for the aviation industry will be cut yet further to around $9.7bn this year.
“Aviation is resilient. And we are rebounding,” Mr Walsh said.
“People who longed for the freedom to fly are taking to the skies again—and in growing numbers. By next year, most markets should see traffic reach or exceed pre-pandemic levels,” he said.
However, Mr Walsh said huge challenges remain in the form of Russia’s invasion of Ukraine, surging inflation and energy prices and a weakening global economy. He said fixing battered airline balance sheets, currently weighed down with combined debt of around $650bn, will be a “monumental” challenge in itself.
“There is no way to sugar coat the bitter economic and political realities we face. But, the desire to travel and the necessity of moving goods are both solid,” he said.
“Recent history supports optimism for aviation in challenging times. During the global financial crisis, travel patterns changed, but passenger numbers held steady, with a quick return to growth from 2010. And the decade that ensued delivered aviation’s strongest financial performance ever,” Mr Walsh said.
“History repeats itself. We already see strong demand that will grow in the months and years ahead,” he said.
Mr Walsh warned that Covid-19 will not be the last global pandemic and that mistakes made in the last two years need to be heeded.
“We, and I mean everyone, must learn from the lessons of Covid-19. We need to be clear with governments on what is needed from regulation,” he said.
“Covid-19 will not be the last global pandemic. We all hope for a very long gap before the next one. But it is vital that we learn from the mistakes made in how aviation was shut down and how it is being reopened”, he said.