African airlines to cut losses to $700m by 2022 (IATA)
Strong pent-up demand and the lifting of travel restrictions in most markets are fuelling a resurgence in demand among African airlines. Instead of generating surpluses, they continue to turn around their losses, as shown by the International Air Transport Association (IATA) projections released on the sidelines of its 78th annual general meeting, currently being held in Doha, Qatar.
Although still in the red, the financial performance of African airlines is expected to continue to improve during this year. According to IATA's projections, released on Monday 20 June, they should lose $700 million in 2022. This is better than the $1.9 billion lost in 2021, and the $2 billion lost in 2020, due to the Covid-19 pandemic.
If the continent's carriers remain in deficit overall, it is because "declining vaccination rates have slowed the recovery of air travel in the region". Demand is expected to reach 72% of pre-crisis levels (2019), and capacity 75.2%.
Globally, carrier losses are forecast at $9.7 billion (an improvement on the October 2021 forecast of $11.6 billion), for a net loss margin of -1.2%. This is still a huge improvement on the losses of $42.1 billion (-8.3% net margin) in 2021, and $137.7 billion (-36.0% net margin) in 2020.
North America is expected to remain the best performing and only profitable region in 2022, with net profit of $8.8 billion, demand of 95% and capacity 99.5% compared to 2019 (pre-Covid-19). Europe is expected to be close to profitability, with a net loss of $3.9 billion, demand of 82.7% and capacity of 90% compared to 2019. Asia-Pacific is expected to narrow its losses to $8.9 billion, with demand at 73.7% and capacity at 81.5%. Latin America is expected to lose $3.2 billion, with demand at 94.2% and capacity at 93.2%. The Middle East is expected to reduce its losses to $1.9 billion, with demand at 79.1% and capacity at 80.5%.
"Profitability is on the horizon for 2023. This is a time for optimism, although there are still cost challenges, particularly fuel, and continuing restrictions in a few key markets," said Willie. Walsh, IATA's director general.
