The airline industry's losses caused by COVID-19 's epidemic are set to exceed $200 billion as travel restrictions put pressure on demand for business and long-haul flights into 2022, according to the industry's main lobby group.
The International Air Transport Association (IATA) said at its annual meeting in Boston on Monday that airlines are expected to lose a total of $11.6 billion next year. The group also raised its forecast for losses this year and revised up its losses for 2020.
Net losses totaling $201 billion during the outbreak exceeded the industry's cumulative profits for nearly nine years, according to IATA. While domestic and regional travel has begun to rebound, there has been little recovery in the global business travel business, which is vital to many airlines.
The US is set to open its borders to transatlantic visitors next month, but other long-distance markets remain lacklustre, especially those connecting Asia with Europe and North America.
"the scale of the crisis caused by the COVID-19 epidemic for the aviation industry is huge," Willie Walsh, director-general of IATA, told the industry's largest executive meeting in more than two years. "people have not lost their desire to travel, as we have seen in the solid resilience of the domestic market. But they are hampered by the limitations, uncertainty and complexity of international travel.
Passenger traffic is expected to reach 40 per cent of pre-epidemic levels this year, rising to 61 per cent by 2022, when the total number of passengers will reach 3.4 billion. This is similar to the 2014 figure, but down about 1/4 from 2019.
IATA forecasts that total losses this year will be close to $52 billion, worse than the $48 billion estimated in April.
Last year's loss was revised up from $126 billion to about $138 billion.
American recovery
Among the global regions, only North American airlines are expected to return to profit next year, with a net profit of nearly $10 billion.
Air cargo is another bright spot. Demand this year is expected to be 8 per cent higher than in 2019 and will grow by more than 13 per cent by 2022, as global restocking and the shift to online purchases have led to a sharp increase in shipments.