0
Menu
News

African Airlines to post US$638 million losses in 2022 - IATA forecast

New Terminal 3 Kotoka Internasdational Airport In Accra File photo of Ghana's Kotoka International Airport - Terminal 3

Thu, 8 Dec 2022 Source: aviationghana.com

African airlines are expected to post US$638 million losses in 2022, narrowing to a loss of $213 million in 2023, the latest International Air Transport Association (IATA) forecast shows.

The African region, according to IATA, is particularly exposed to macro-economic headwinds which have increased the vulnerability of several economies and rendered connectivity more complex.

Passenger demand is expected to grow at 27.4%, outpacing capacity growth of 21.9%. Over the 2023 year, the region is expected to serve 86.3% of pre-crisis demand levels with 83.9% of pre-crisis capacity.

On the global level, the International Air Transport Association (IATA) expects a return to profitability for the global airline industry in 2023, as airlines continue to cut losses stemming from the effects of the COVID-19 pandemic to their business in 2022.

Willie Walsh, IATA’s Director General, noted that: “Resilience has been the hallmark for airlines in the COVID-19 crisis. As we look to 2023, the financial recovery will take shape with a first industry profit since 2019. That is a great achievement considering the scale of the financial and economic damage caused by government imposed pandemic restrictions.  But a $4.7 billion profit on industry revenues of $779 billion also illustrates that there is much more ground to cover to put the global industry on a solid financial footing.

Many airlines are sufficiently profitable to attract the capital needed to drive the industry forward as it decarbonizes. But many others are struggling for a variety of reasons. These include onerous regulation, high costs, inconsistent government policies, inefficient infrastructure and a value chain where the rewards of connecting the world are not equitably distributed.”

Globally, in 2023, airlines are expected to post a small net profit of $4.7 billion—a 0.6% net profit margin. It is the first profit since 2019 when industry net profits were $26.4 billion (3.1% net profit margin).

In 2022, airline net losses are expected to be $6.9 billion (an improvement on the $9.7 billion loss for 2022 in IATA’s June outlook). This is significantly better than the losses of $42.0 billion and $137.7 billion that were realized in 2021 and 2020 respectively.

Source: aviationghana.com
Related Articles: