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DOHA: A sharp bounce-back in air travel from the pandemic will allow global airlines to narrow losses this year and possibly claw their way back to profit in 2023, an industry body said as it upgraded widely watched forecasts on Monday.
Global airlines are now expected to post a $9.7 billion loss in 2022, in a sharp improvement from a revised $42.1 billion loss in 2021, the International Air Transport Association said.
The 2022 forecast is nearly $2 billion better than an earlier expectation of a $11.6 billion loss.
Last year's losses also improve on an earlier forecast of $52 billion, though airlines meeting in Qatar have been warned high oil prices and inflation risk denting the fragile recovery.
"Our industry is now leaner, tougher, and nimbler," IATA Director General Willie Walsh told an annual meeting of more than 100 airline leaders. "Industry-wide profit should be on the horizon in 2023," he added.
North America is expected to remain the strongest-performing region and the only one to post a profit in 2022, expected at $8.8 billion.
In Asia, where Chinese borders remain closed and its domestic market under strain due to a zero-COVID strategy, airlines are forecasting a collective $8.9 billion loss.
The improved outlook comes as airports and airlines race to hire thousands to cope with resurgent demand as people seek to make up for vacations lost during the pandemic.
Some *** ysts have voiced concerns that soaring fares and pressure on consumer spending from inflation and rising borrowing costs could cause demand to fall sharply after the northern summer peak.
In an interview, Walsh played down concerns of a so-called 'demand cliff' that would spell a short-lived recovery.
"I don't think it's a flash in the pan. I think there is some pent-up demand being fulfilled at the moment, but you've got to remember we're still well below where we were in 2019," he told Reuters.
"So I think there's still a lot of ground to make up before we can get into the debate as to whether we'll see that taper off." - Reuters