Ever since the start of the coronavirus pandemic, it has been clear that the global health crisis would severely impact the aviation industry. However, the exact extent of this is now becoming quantifiable, with data experts Cirium putting the industry's losses since COVID-19 first struck in the hundreds of millions of dollars.
Heavy losses
Earlier this morning, Cirium released a statement detailing its analysis of the World Airline Group Finance Rankings. The UK-based travel data and analytics giant examined 18 months' worth of financial results in this study, with the period in question consisting of all of 2021, as well as the first six months of 2022.
The results are eye-catching, if not unexpected. Overall, the company found that the drop in airline revenues since the coronavirus pandemic began has led to industry-wide net losses totaling almost $220 billion. Revenues were cut in two in 2020, and, even by the end of 2021, were still 40% lower than those seen before the pandemic. Breaking down the losses, Cirium CEO Jeremy Bowen stated that:
“The net deficit is decreasing year-over-year. In 2020, the revenue decline translated into net losses of $160 billion, another $42 billion last year, and losses for the first half of this year total [of] around $15 billion. If losses so far this year aren’t substantially added to, that would leave the airline industry with [an] overall net loss of nearly $220 billion since the start of 2020."
Get all the latest aviation news right here on Simple Flying!
2022 has been a mixed bag
The fact that the industry's decline in revenues has slowed so significantly is a positive sign that a sustained recovery is afoot. However, this year hasn't been all plain sailing. Indeed, widespread operational disruptions and strike action have been among the factors that meant that, by July, there had already been more canceled flights than in the whole of 2021. That being said, far more flights have operated.
Cirium notes that 2022 began strongly from a financial perspective, with revenues up by 70%. While they are yet to reach pre-pandemic levels, the company reports that they are now within 20% of such figures. Looking forward, Bowen adds:
"If we assume that there are no further shocks to the industry, there is the possibility that the industry may break even in the second half of the year, led by US and European groups."
US carriers are recovering particularly strongly
As mentioned, US airlines are among those leading the charge toward a sustained recovery in 2022. This is evident when examining how carriers have performed on an individual basis, with four of the top five carriers as listed by 2022 revenues being US-based. Delta Air Lines sits top, followed by FedEx, American, and United. Meanwhile, German flag carrier Lufthansa completes the top five.
As a result of this, the largest US carriers have been achieving record revenues and overall net profits this year. Europe isn't far behind in its recovery, with traffic in the west of the region having reached 95% of pre-pandemic levels. Further east, operations have been compromised by the war in Ukraine. Asia also continues to struggle, with China's ongoing restrictions playing a key role in this.