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

Regional Performance

All regions will improve their collective financial performance compared to 2020. The strongest performing region is North America which is expected to see a $5.5 billion loss in 2021 transform to a $9.9 billion profit in 2022. All other regions will see reduced losses in 2022 compared to 2021.

• North American carriers are expected to outperform other regions on the back of fast recovery of the US domestic market. The opening of the US market to vaccinated travelers from November 2021 will progress the recovery to international markets. The US industry started to turn cash-positive in the second quarter of 2021 and will be the only region in positive financial territory in 2022 with an expected $9.9 billion profit. 

• European carriers will see their losses cut from $20.9 billion in 2021 to $9.2 billion in 2022. Shifting rules and confused application of EC recommendations across Europe compromised the expected positive impact of rising vaccination rates and establishment of the European Digital COVID Certificate. Better coordination between governments is expected to see a broader opening of international markets in the months ahead, boosted significantly by the re-establishment of transatlantic travel for vaccinated travelers. Long-haul demand, however, will significantly lag behind the recovery in intra-European travel.

• Asia-Pacific carriers are expected to see losses diminish from $11.2 billion in 2021 to $2.4 billion in 2022. The region continues to suffer some of the most draconian travel restrictions. While there has been some alleviation in restrictions, significant improvements in international markets are not expected until later in 2022. Reduced losses are expected to be achieved on the back of large and largely open domestic markets, not least of which is China. The region’s carriers are also benefitting disproportionally from the strength of air cargo markets in which they are dominant. 

• Latin American carriers will see losses cut from $5.6 billion this year to $3.7 billion in 2022. Most of the region’s markets are open, but with some notable exceptions (Argentina for example). The strength of the US-Latin American market will be a major contributing factor to improvement. Significant restructuring costs as the regions carriers adjust to the new business realities will weigh on financial performance, keeping the region in a collective loss.

• Middle Eastern carriers will see very limited improvement in their financial performance from a $6.8 billion loss in 2021 to a $4.6 billion loss in 2022. Without large domestic markets, the region’s major carriers rely significantly on connecting traffic, especially to Asia-Pacific which has been slow to re-open to international traffic. 

• African carriers will see a very slow pace of recovery in financial performance from a $1.9 billion loss in 2021 to a $1.5 billion loss in 2022. Low vaccination rates across the continent are expected to severely dampen demand throughout 2022. The slight improvement is built on the expectation of some recovery in intra-Africa travel and travel to some tourist destination with relatively higher vaccination rates.