The global airline industry is projected to report a lower loss at $6.9 billion in 2022, mainly due to stronger passenger yields and cost control by carriers amid rising fuel prices, according to industry body IATA.

In June, the International Air Transport Association (IATA) projected the industry loss at $9.7 billion. In October 2021, it forecast a loss of $1.6 billion for this year.

On Tuesday, the IATA said the global airline industry is expected to return to profitability in 2023 and post a small net profit of $4.7 billion.

After being significantly impacted by the coronavirus pandemic, the airline industry is on the recovery path.

In 2022, airline’s net loss is expected to be $6.9 billion. This is significantly better than the loss of $42 billion and $137.7 billion in 2021 and 2020, respectively, it said.

“We are on the right path... but still a long way to go,” IATA director general Willie Walsh said at a briefing here on Tuesday.

For 2022, IATA said the improved prospects stem largely from strengthened yields and strong cost control in the face of rising fuel prices.

“Passenger yields are expected to grow by 8.4 per cent (up from 5.6 per cent anticipated in June). Propelled by that strength, passenger revenues are expected to grow $438 billion (up from $239 billion in 2021),” it noted.

In the Asia Pacific region, airlines are projected to post a loss of $10 billion this year and the loss is expected to narrow to $6.6 billion in 2023.

The Asia Pacific region, the IATA said, is critically held back by the impact of China’s zero Covid policies on travel.

“In 2023, passenger demand of 59.8 per cent is expected to outpace capacity growth of 47.8 per cent.

“Over the year, the region is expected to serve 70.8 percent of pre-crisis demand levels with 75.5 per cent of pre-crisis capacity,” the industry grouping said.

For the airlines, the return on invested capital is projected to be a negative of 1.7 per cent this year and turn positive at 0.6 per cent in 2023.

The job of airline managements will remain challenging as careful watch on economic uncertainties will be critical, he said, adding that airline profitability is razor thin. The IATA and McKinsey has published a study on the profitability of the airline value chain.