The International Air Transport Association, IATA, has announced an upgrade to its outline for the financial performance of the airline industry in 2022 as the pace of recovery from the Coronavirus crisis quickens
According to the most recent forecast from IATA, the industry losses are expected to reduce to -€9.2 billion for a net loss marking of -1.2 per cent. That is a huge improvement from the losses of €130.7 billion in 2020 and €39.9 billion in 2021.
The same forecasts that passenger numbers will reach 83 per cent of the pre-pandemic levels in 2022
“It is a time for optimism, even if there are still challenges on costs, particularly fuel, and some lingering restrictions in a few key markets,” the Director-General of IATA, Willie Walsh, said.
IATA notes that revenues are rising as the CIVUD-19 restrictions relax and people return to travel. However, it has been emphasised that the challenge for 2022 is to keep costs under control.
Industry revenues are expected to reach €742.7 or 93.3 per cent of the 2019 levels. As for the flights operated in 2022, they are expected to total 33.8 million – 86.9 per cent of 2019 levels (38.9 million flights).
IATA further explains that passenger revenues are expected to account for €473.1 billion of industry revenues, more than double the €227 generated in 2021. Scheduled passenger numbers for this year are expected to reach 3.8 billion, with revenue passenger kilometres growing 7.6 per cent compared with 2021.
Additionally, IATA has pointed out that the overall expenses are expected to rise to €755.7 billion, which is a 44 per cent increase compared with 2021.
At €182.1 billion, fuel is expected to be the largest cost item in the industry in 2022. Such a prediction is based on an expected average price for Brent crude of €9/barrel and €119 for jet kerosene.
“War in Ukraine is keeping prices for Brent crude oil high. Nonetheless, fuel will account for about a quarter of costs in 2022. A particular feature of this year’s fuel market is the high spread between crude and jet fuel prices. This jet crack spread remains well above historical norms, mostly owing to capacity constraints at refineries,” IATA states.
The latter explained that there are a number of risk factors associated with this outlook, including the war in Ukraine, inflation, interest rates, and exchange rate, as well as the COVID-19.