RIYADH: A sharp bounceback in air travel from the COVID-19 pandemic will help the Middle East’s aviation industry narrow its net losses to $1.9 billion in 2022 from $4 billion in the previous year, according to the International Air Transport Authority.

In its outlook for the airline sector’s 2022 financial performance, IATA predicted that global industry loss will be reduced to $9.7 billion this year, compared to the losses of $137 billion and $42.1 billion incurred in 2020 and 2021 respectively. 

IATA added that industry-wide profitability is already on cards, as the North American region is expected to deliver an $8.8 billion profit in 2022. IATA’s press release further noted that passenger numbers will reach 83 percent of the pre-pandemic levels in 2022.

“Strong pent-up demand, the lifting of travel restrictions in most markets, low unemployment in most countries, and expanded personal savings are fueling a resurgence in demand that will see passenger numbers reach 83 percent of pre-pandemic levels in 2022,” it said. 

Airline sector is resilient

IATA’s Director General Willie Walsh said that the airline sector is resilient as people are coming back to travel, and cargoes are performing well amid looming economic uncertainty. 

“Profitability is on the horizon for 2023. It is a time for optimism, even if there are still challenges on costs, particularly fuel, and some lingering restrictions in a few key markets,” said Walsh. 

Passenger revenues to be doubled

According to IATA’s outlook, passenger revenues in 2022 will hit $498 billion, more than double the $239 billion generated in 2021. 

The press release further noted that scheduled passengers will hit 3.8 billion with revenue passenger kilometers growing 97.6 percent compared with 2021, reaching 82.4 percent of 2019 traffic.

Cargo revenues are expected to account for $191 billion of industry revenues, down slightly from the $204 billion recorded in 2021, but nearly double the $100 billion revenue generated in 2020, IATA added. 

IATA also predicted that the industry is expected to carry over 68 million tons of cargo in 2022, which is a record high. 

Overall expenses are expected to rise to $796 billion in 2022, a 44 percent increase compared to 2021, primarily driven due to higher fuel and labor costs.