The Rocky Road
to Recovery — April 2023

From the start of the jet age in the 1950s to the end of 2019 the commercial airline industry had generated around $200bn total net profits. In the three years since the start of the Covid-19 pandemic the industry is estimated to have lost $186bn. And those losses have in simplistic terms been covered by debts: IATA estimates that the world’s airlines' total debt burden has risen by over $220bn, or 50%, since the beginning of 2020 to give an industry total of $650bn.

But the industry is on the road to recovery. Airline traffic in domestic, US and European markets is gradually approaching, if not in some cases exceeding pre-pandemic levels. Sustained travel restrictions in Asia, combined with China’s zero-covid policy had restrained the ability to fly in that area of the world through most of 2022. That policy and those barriers have now gone, leading to a rapid recovery particularly in the Chinese domestic market: the latest figures from IATA for February show domestic traffic in the PRC only 8% below pre-pandemic levels. International traffic as expected has further to go: overall in February global RPKs were still 22% below those in the same month of 2019. But this masks a stronger performance in Western markets: IATA’s figures show demand on North- and Mid-Atlantic routes almost back to “normal”.