There’s no doubt that most of 2020 and all of 2021 has been brutal for the airline industry because of the COVID-19 pandemic. Fortunately, industry analysts now project that the world’s air carriers will likely reduce their losses in 2022 by a whopping 78% as they work to emerge from one of the most financially trying times in commercial aviation’s history.
Greatly Reducing Losses
Airlines are likely to lose a massive $200 billion through next year due to the coronavirus pandemic. However, the severity of the downturn in 2022 will be greatly lessened, with carriers reducing losses by 78% to $12 billion for the year, according to the International Air Transport Association. IATA is the industry’s leading global trade group and promulgator of many international air transportation guidelines.
Emerging from Turbulence
If IATA is correct in its forecast, a “path to recovery iscoming into view” for commercial aviation. In 2021, the industry group representing almost 300 airlines and more than 80% of global air trafficprojects that losses will be worse than thought and will likely total $51.8 billion. Though that figure seems steep, it’s far lower than the net loss of $137.7 billion airlines suffered in 2020, as lockdowns and other stringent COVID-19 countermeasures imposed by most nations reduced global air travel to nearlyzero for many months.
Prognosis for the Future
If IATA is correct and airlines can reduce losses to “only” $12 billion in 2022, the industry truly is headed for a strong rebound. The group’s leaders feel that air carriers are now past the most intense part of the crisis. They also say that while serious issues certainly remain, the industry’s recovery seems to be more and more likely.
Return to Profitability
Commercial air transportation should return to profitability in 2023, IATA leaders say. For 2022, total passenger numbers will rise to around 3.4 billion people, a very large increase from a projected 2.3 billion travelers in 2021. The steady decrease in international travel restrictions due to the COVID-19 pandemic is helping to fuel the rise in flight bookings, though a lack of uniform pandemic guidelines among nations has created a regulatory maze airlines are struggling to pass through.
US Travel Restrictions
The United States government has said it will be lifting all bans on international visitors by November of this year. Those restrictions had been put in place early during the coronavirus’ spread. However, the US hasn’t yet set a date in November for the end of those restrictions. Likely, their cancellation will come prior to the start of the very busy holiday travel season, allowing airlines to carry travelers into the United States without any major pandemic issues.
IATA’s 2022 and 2023 predictions couldn’t have come at a better time for the world’s air carriers. For one, an end to losses and a return to profitability should help fuel investor confidence as airline bottom lines stabilize and growth is more reasonably assured. No doubt, the world’s air travelers will also appreciate the fact that their favorite airlines will probably be flying the once-turbulent skies now as well as in the future.
Kelly Hoggan, Founder and CEO of H4 Solutions, previously served as assistant administrator for operations at the Transportation Security Administration. In that role, he was responsible for aircraft and checkpoint security operations at the nation's 450-plus commercial airports.