Airlines are expected to post lower-than-expected losses this year despite an economic slowdown hurting demand, their parent organization said Tuesday.
Driven mainly by the recovery in the United States, the companies should post a cumulative profit of 4.7 billion dollars in 2023, the International Air Transport Association (Iata) announced. Now it estimates the losses for 2022 at 6.9 billion compared to the 9.7 billion mentioned so far. Carriers continue to absorb their losses in this way, which were 42,000 million in 2021 and 137,700 million in 2020 in the context of the health crisis.
But not all regions of the world will return to green next year and some will only do so narrowly, Iata stressed during “press days” organized at its headquarters in Geneva. Thus, companies based in North America should close 2023 with a total profit of 11.4 billion dollars, while Europe and the Middle East will barely come out of the red with 600 and 300 million euros of accumulated profits respectively, according to Iata figures.
On the other hand, Asia-Pacific airlines will remain in negative territory, with expected losses of 6.6 billion next year, due in particular to persistent travel restrictions in China, the area’s main air market. And according to Iata, the same deficit situation will affect companies in Latin America (800 million dollars of accumulated losses) and in Africa (200 million) in 2023.
Impact of China’s “zero covid” policy
The “zero Covid” policy that continues so far in China has also affected Iata’s passenger traffic estimate for 2022 globally, at 70.6% of the 2019 level, up from 82.4% so far. discounted here. Added to this was a downward revision of global growth since the publication of the agency’s previous projections at its general assembly last June, in a context of rising inflation, especially in the energy sphere.
By 2023, airlines expect to recover 85.5% of pre-crisis traffic levels, measured in revenue per passenger-kilometres (RPK), one of the industry benchmarks. The Covid-19 and its procession of border closures and other movement restrictions presented the sector with the worst crisis in its history: traffic had plummeted by almost two-thirds in 2020 compared to the previous year.
However, Iata has estimated that the number of air passengers will return to the 4 billion mark in 2023, to 4.2 billion travelers, compared to the all-time record of 4.5 billion registered in 2019.
Source: BFM TV
