Airlines’ losses from the coronavirus pandemic are expected to exceed $ 200 billion as travel restrictions weigh on business and long-haul demand through 2022, according to the industry’s main lobby.
Carriers are set to post a collective deficit of $ 11.6 billion next year, the International Air Transport Association in Boston said on Monday at its annual meeting. The professional body has also increased its estimate of losses for this year and revised upwards the shortfall for 2020.
The combined net losses of $ 201 billion during the pandemic period eclipse nearly nine years of industry revenue, according to IATA figures. As domestic and regional travel has started to rebound, there has been little recovery in trade routes across the world, so crucial for many carriers.
The United States is set to open its borders to transatlantic visitors next month, but other long-haul markets remain in the doldrums, especially those connecting Asia to Europe and South America. North.
“The scale of the Covid-19 crisis for airlines is enormous,” IATA chief executive Willie Walsh told the industry’s largest gathering of chief executives in more than two years. “People have not lost their desire to travel, as we see in the strong resilience of the internal market. But they are prevented from traveling abroad by restrictions, uncertainty and complexity. “
Carriers face an additional challenge in meeting the demands that the industry is accelerating to reduce its carbon footprint. The pressure, which started before the pandemic, has only increased in recent months. IATA stepped up its targets on Monday, setting a goal of reaching zero net emissions by 2050.
Passenger traffic – the number of people traveling times the distance traveled – is expected to reach 40% of pre-pandemic levels this year, reaching 61% in 2022, when the number of travelers is expected to be 3.4 billion . This is similar to the number of customers for 2014, but about a quarter less than the number for 2019.
To facilitate the recovery, Walsh called on governments to simplify complex travel restrictions and allow vaccinated travelers to move freely between countries.
“Travel restrictions have given governments time to respond to the onset of the pandemic,” he said. “Almost two years later, that rationale no longer exists.”
Losses this year will total nearly $ 52 billion, IATA predicts, worse than an estimated $ 48 billion in April, after flights remained limited during the normally lucrative northern summer.
Last year’s loss has been revised to around $ 138 billion from $ 126 billion.
Among the world’s regions, only carriers in North America are expected to return to profit next year, with nearly $ 10 billion in net income. European airlines will register around $ 9.2 billion in losses, according to IATA, while operators in the Middle East, heavily dependent on intercontinental routes, will run a deficit of $ 4.6 billion.
Walsh, former CEO of British Airways owner IAG SA, offered some optimism to the assembled airline executives, saying the industry had “well passed the deepest point of the crisis” and that “the road to recovery is on its way. was drawing ”.
Domestic flights, benefiting from the removal of curbs, will almost return to pre-pandemic passenger levels next year, IATA said.
Air freight is another bright spot, with demand this year expected to be 8% above 2019 levels, reaching over 13% more in 2022 amid increased shipments resulting from a global resupply. and the shift to online shopping.
Walsh said carriers will continue to need wage support measures from governments until international travel recovers on a large scale, as well as regulatory measures such as the suspension of user rules. or loss for airport slots.
Airlines are expected to reduce capacity faster than traffic rebounds, which will hurt seat occupancy levels. The average passenger load factor is expected to be around 67% this year, reaching 75% in 2022, which is still well below the record figure of 83% set in 2019.
While IATA represents 290 airlines accounting for 82% of global air traffic, its members exclude several low-cost carriers which are among those expected to rebound fastest after the crisis.