In its latest report on the evolution of air transport, the IATA (International Air Transport Association) predicts that the airline industry will continue to recover in both 2022 and 2023.
In its latest forecasts and previsions for the end of the year 2022 and for the coming year 2023, the International Air Transport Association IATA estimates that the industry has shown its strong resilience following the pandemic years. In 2022 the air transport industry continued its recovery after the largest shock in aviation’s history brought by the Covid-19. Traffic is now forecast to grow at a record rate in 2022, and to continue to grow -albeit at a slower pace- in 2023 and beyond.
IATA indicates that the industry has been stronger this year than previously anticipated, bolstered by the release of pent-up demand for air travel as routes re-opened. This drove IATA to a modest upwards revision to its 2022 financial forecast. Earlier estimation mentioned about a loss this year of $10bn (€9.5bn). IATA now estimates that the industry’s losses should be around $7bn. The association predicts that in 2023, the industry will finally see its first profits in three years, at around $4.6bn.
To date, domestic air connectivity has recovered to around 89% of its pre-Covid level and international connectivity is currently at around 68% of the level of 2019. The gap between the two is closing, reflecting the broader re-opening of international routes over the course of this year.
North America, Europe and the Middle East to be profitable in 2023
In its forecast, IATA expects that growth in connectivity will continue. Positive developments in China and the Asia-Pacific region will be essential to the pace of this recovery over 2023 and beyond.
Industry wide, total airline revenue is expected to recover to around 93% of the pre-Covid level in 2023. This reflects additional recovery in air passenger revenue to around $522 billion (approx. 86% of the 2019 level). Financial recovery will vary from one region to another although financial performance will improve for each region.
Based on IATA estimates, North America is the only region to return to profitability in 2022. But it will be joined by two more regions in 2023; Europe and the Middle East. Next year, IATA forecasts that Latin America, Africa, and Asia/Pacific will remain in the red.