IATA’s latest global airline financial outlook: Revenues, Yields and Costs
The International Air Transport Association (IATA) opened its annual general meeting in Boston and announced its latest outlook for airline industry financial performance showing improved results amid the continuing COVID-19 crisis:
Revenue and Yield
Overall revenues in 2021 are expected to grow by 26.7% compared to 2020 to $472 billion (similar to 2009 levels). Further growth of 39.3% in 2022 will see industry revenues rise to $658 billion (similar to 2011 levels).
- The passenger business will contribute $227 billion to industry revenues in 2021, rising to $378 billion in 2022. Passenger yields declined each year between 2012 and 2020. In 2021 yields are expected to grow by 2.0% and a further 10% in 2022.
- Cargo revenues are expected to rise to a record $175 billion in 2021 with a similar $169 billion expected in 2022. Cargo yields are expected to grow by 15% in 2021 but decline by 8% in 2022.
Costs
- Airlines achieved aggressive cost reductions having reduced overall expenses by 34% in 2021 compared to 2019. Costs, however, will rise in 2022 and will be only 15% lower compared with pre-crisis levels with expanded operations and higher fuel prices.
- The price of jet kerosene was the only respite for airlines in 2020. It fell to $46.6/barrel in 2020 from $77/barrel in 2019. Kerosene prices increased to an average of $74.5/barrel in 2021 and are expected to rise further to $77.8/barrel in 2022.
- Non-fuel unit costs rose 19% in 2020 compared to 2019, as fixed costs had to be spread over a dramatically smaller capacity base. This will partially reverse in 2021 with an 8% reduction from 2020 levels. Capacity growth will spread fixed costs more broadly while cost cutting efforts continue. In 2022, we expect a 2% increase.