Industry sees profit on the not-so-distant horizon

• Author: Christopher Jasper
• Published date: 24 June 2022
• Publication title: New Zealand Herald, The (Auckland, New Zealand)

Losses this year are likely to total US$9.7 billion ($15.3b) as air travel begins its recovery from the coronavirus crisis, the airline body said this week in an update at its annual meeting in Doha, an improvement on the US$11.6b deficit predicted at the previous gathering last October

“Industry-wide profit should be on the horizon in 2023,” Iata director general Willie Walsh told the gathering of airline chiefs. “We are rebounding. By next year, most markets should see traffic reach or exceed pre-pandemic levels.”

While most carriers worldwide are enjoying bumper sales as customers flood back following the lifting of COVID curbs, taking leisure trips and catching up with friends and family, there are doubts about how long the surge will continue as high fuel prices push airlines to hike fares and inflationary pressures weigh on household spending.

Walsh said that while “there is no way to sugar coat the bitter economic and political realities,” at the same time “the desire to travel and the necessity of moving goods are both solid.”

Iata also said that 2021’s loss amounted to US$42b, better than the US$52b shortfall previously envisioned.

The industry has emerged “leaner, tougher, and nimble”, having defied predictions of widespread bankruptcies and failures, Walsh said. The situation was helped by the industry having enjoyed its best-ever run of profits before the pandemic, though fixing balance sheets carrying debts of US$650b remains a “monumental challenge,” he said.

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