GLOBAL air transport is on course to return to profit after two pandemic-battered years but the war in Ukraine and the cost-of-living crisis lurk as threats, the industry's world body said on Monday.
Renewed profitability "appears within reach" in 2023, the International Air Transport Association said, predicting a rebound in passenger levels to 83 per cent of pre-pandemic levels this year.
Industry losses are expected to drop to $9.7 billion in 2022, a "huge improvement" from $137.7 billion in 2020 and $42.1 billion in 2021, IATA said in an upgraded industry outlook at its annual general meeting in Doha.
"Airlines are resilient. People are flying in ever greater numbers. And cargo is performing well against a backdrop of growing economic uncertainty," IATA director general Willie Walsh said.
The air industry was sent reeling by the pandemic, with passenger numbers plunging 60 per cent in 2020 and remaining 50 per cent down in 2021. Airlines lost nearly $200 billion over two years.
While some firms in the sector went bankrupt, others -- often those backed by states -- have emerged with profits intact.
IATA said there were positive signs in the latest figures, with North American carriers expected to return an $8.8 billion profit this year.
More than 1,200 aircraft are expected to be delivered in 2022, while cargo volumes should reach a record 68.4 million tonnes "despite economic challenges", it added.
"Strong pent-up demand, the lifting of travel restrictions in most markets, low unemployment in most countries, and expanded personal savings are fuelling a resurgence in demand that will see passenger numbers reach 83 per cent of pre-pandemic levels in 2022," IATA said.
- Clouds on the horizon -
Turnover should reach 93 percent of 2019 levels this year or $782 billion, a rebound of 54.5 per cent on 2021, as revenues from passenger flights more than double to $498 billion.
Cargo, a rare bright spot for air transport in the depths of the pandemic, will retreat slightly with revenues of $191 billion -- still double the level of 2019.
Clouds remain on the horizon, however, especially the war in Ukraine after the closure of Russian airspace to several long-haul carriers forced them into costly detours.
Airlines, desperate to put the coronavirus pandemic behind them, are facing a potential summer of chaos with shortages and strikes that could threaten their recovery.
In the past few weeks, delays and cancellations caused by a lack of staff at airports and strikes for better pay have wreaked havoc upon travellers.
The problems originate with the pandemic when airlines and airports laid off thousands of workers during its worst-ever crisis. Now, they are scrambling for employees.
However, Walsh played down the difficulties, saying they weren't widespread and should ease in time.
High inflation will also erode the purchasing power of consumers, although airlines could profit from rising prices and interest rates as their debts are locked in at lower levels.
Meanwhile, the industry remains wary of new coronavirus variations that could close borders once again.
China is still bound up with restrictions that are depressing the world's second-biggest domestic market and are creating "chaos" in global logistics, said IATA's chief economist Marie Owens Thomsen.
IATA originally planned to hold its annual general meeting in Shanghai, but moved it to Qatar as China, pursuing its "zero-COVID" policy, continues to grapple with the pandemic.
ETX Studio
Tue Jun 21 2022
Departure ticket counters at Los Angeles International Airport in Los Angeles, California. - ETX Studio
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.
NFOF will be operational in November 2024 with funding of RM1 bil
PM Anwar Ibrahim said NFOF will support venture capital fund managers to invest in startup companies with RM300 million set aside for 2025.
Minimum wage to increase to RM1,700 effective Feb 1, 2025
The Progressive Wage Policy would be fully enforced next year with an allocation of RM200 million, benefiting 50,000 workers.
Bursa Malaysia ends higher on Budget 2025 optimism
The benchmark index, which opened 1.85 points higher at 1,643.29, moved between 1,641.71 and 1,649.31 throughout the trading session.
Five important aspects relating to people’s lives in Budget 2025 - PM
The focus is on driving the MADANI Economy, speeding reforms, cutting red tape, raising wages, and tackling the cost of living.
Economic outlook: Govt plans to leverage, expand existing city transit system
The expansion aims to provide a more efficient and reliable public transportation network, reduce congestion, and improve accessibility.
Economic outlook: Budget 2025 to lay foundation for a digital-driven economy
The report said Budget 2025 will entail efforts to position Kuala Lumpur as a top 20 global startup hub by 2030 through the KL20 initiative.
Economic outlook: Corruption and lack of accountability hinder economic progress
Special Cabinet Committee on National governance is established to curb corruption, law reforms to modernise outdate regulations, MoF said.
National Wages Consultative Council will be strengthened
The govt will also incentivise hiring women returning from career breaks, offer job matching and improve care services facilities.
Economic outlook: Ensuring 11 years of compulsory education for all children
Budget 2025 will continue prioritising upskilling and retraining initiatives to equip workers with the latest skill sets necessary.
Consolidated public sector projected to record lower surplus of RM41.7 bil 2024
The MoF said the consolidated general government revenue is estimated to increase slightly to RM384.7 billion in 2024.
PM announces substantial Budget 2025 hastening Malaysia to become Asian economic powerhouse
Datuk Seri Anwar Ibrahim said it would create jobs and also tackle financial leakages to enhance public spending efficiency.