The International Air Transport Association (IATA) has improved its forecasts for the sector in 2022 and expects losses to be 16% lower than initially reported, going from 11,600 million dollars (11,020 million euros) to 9,700 million (9,214 million).
After another year of losses, although already well below the 137.7 billion dollars in 2020 and 42 billion in 2021, the profitability of the entire industry “seems to be within reach” in 2023, according to IATA.
In fact, despite the rise in fuel, North America is expected to be profitable again in 2022, generating profits of 8.8 billion dollars, its CEO, Willie Walsh, said Monday at the 78th General Assembly. IATA Annual.
In Europe, which is nearing profitability in 2022, the war between Russia and Ukraine will continue to disrupt travel patterns within the continent and between it and Asia-Pacific, although the conflict is not expected to derail the travel recovery.
Industry revenue is expected to reach $782 billion this year, 54.5% more than in 2021, recovering 93.3% of 2019 levels, of which $498 billion will come from ticket sales , more than double the 239,000 million generated in 2021.
IATA forecasts that this year 3,800 million passengers will be reached, recovering 82.4% of the 2019 traffic and that 33.8 million flights will be operated, which represents 86.9% of prevocovid levels (38, 9 million flights).
“It’s a time for optimism, even if there are still cost challenges, particularly fuel, and some lingering restrictions in some key markets,” added Walsh.
In his opinion, the reduction in losses is the result of “hard work to keep costs under control as the industry advances.”
Costs have increased by 44% compared to 2021, to 796,000 million dollars, of which 192,000 million correspond to fuel, which increases its weight from 19% in 2019 to 24% today.
The war in Ukraine keeps Brent barrel prices high and a particular feature of this year’s fuel market is the high spread between crude and aircraft prices, mainly due to capacity constraints at refineries.
Underinvestment in this area could mean the spread remains high until 2023, and at the same time, high oil and fuel prices are likely to cause airlines to improve their consumption, either by using more efficient aircraft or with operational decisions, he pointed out.
Labor is the second highest operating cost for airlines and direct employment in the sector is expected to reach 2.7 million, up 4.3% from 2021 as the industry recovers from the significant decrease in activity in 2020.
However, employment is still somewhat down from 2019’s 2.93 million and is expected to remain at this level for some time.
Melissa Galbraith is the World News reporter for Globe Live Media. She covers all the major events happening around the World. From Europe to Americas, from Asia to Antarctica, Melissa covers it all. Never miss another Major World Event by bookmarking her author page right here.