Airline industry losses to top $200 billion in 2020-2022

Re-establishing global connectivity, the 11.3 million jobs (pre-COVID-19) in the aviation industry, and the $3.5 trillion of GDP associated with travel and tourism should be priorities for governments.

“Aviation is resilient and resourceful, but the scale of this crisis needs solutions that only governments can provide. Financial support was a lifeline for many airlines during the crisis. Much of that—approximately $110 billion— is in the form of support that needs to be paid back. Combined with commercial borrowing the industry is now highly leveraged. We don’t want handouts, but wage support measures to retain critical skills may be necessary for some airlines until governments enable international travel at scale. And regulatory alleviations—like continued slot wavers while international traffic recovers—will be needed well into 2022,” said Walsh.

Global demand, measured in RPKs, is recovering steadily, says IATA.

• In 2021 overall demand is expected to reach 40% of pre-crisis (2019) levels. Capacity is expected to increase faster than demand growth, reaching 50% of pre-crisis levels for 2021. The average passenger load factor in 2021 is expected to be just 67.1%, a level not seen since 1994.
• In 2022 overall demand is expected to reach 61% of pre-crisis (2019) levels. Capacity is expected to continue to increase faster than demand, reaching 67% of pre-crisis levels for 2022. Average passenger load factors are expected to recover to 75.1%, a level exceeded in every year since 2005 until this crisis hit, and far below the 82.6% record set in 2019.

Domestic demand, with fewer restrictions in most countries, is driving the recovery. Global GDP is expected to grow by 5.8% in 2021 and a further 4.1% in 2022. Additionally, accumulated consumer savings (worth 10-20% of GDP in some countries) is supporting the alleviation of pent-up demand in unrestricted domestic markets. 

• In 2021 domestic demand is expected to reach 73% of pre-crisis (2019) levels. 
• In 2022 domestic demand is expected to reach 93% of pre-crisis (2019) levels.

International demand is the slowest to recover owing to continuing restrictions on the freedom of movement across borders, quarantine measures and traveler uncertainty. 

• In 2021 international demand is expected to reach 22% of pre-crisis (2019) levels. 
• In 2022 international demand is expected to reach 44% of pre-crisis (2019) levels.

Cargo demand (measured in CTK) is strong as companies continue to re-stock. The World Trade Organization forecasts world trade to grow at 9.5% in 2021 and 5.6% in 2022.

• In 2021 cargo demand is expected to exceed pre-crisis (2019) levels by 8%. 
• In 2022 cargo demand is expected to exceed pre-crisis (2019) levels by 13%.

Overall revenues in 2021 are expected to grow by 26.7% compared to 2020 to $472 billion (similar to 2009 levels). Further growth of 39.3% in 2022 will see industry revenues rise to $658 billion (similar to 2011 levels). 

• The passenger business will contribute $227 billion to industry revenues in 2021, rising to $378 billion in 2022. Passenger yields declined each year between 2012 and 2020. In 2021 yields are expected to grow by 2.0% and a further 10% in 2022.
• Cargo revenues are expected to rise to a record $175 billion in 2021 with a similar $169 billion expected in 2022. Cargo yields are expected to grow by 15% in 2021 but decline by 8% in 2022.