European airlines: intra-Eur, N Atlantic to boost 2022 & reduce losses

According to IATA's Oct-2021 airline industry financial forecast, European airlines will benefit from the two fastest recovering international passenger markets in 2022.

Intra-Europe RPKs are forecast at 75% of 2019 volumes next year, with North Atlantic RPKs at 65% - both ahead of all other main international regions.

The intra-Europe recovery is good news especially for Europe's leading ultra-LCCs Wizz Air and Ryanair. The North Atlantic reopening to European travellers is positive for IAG, Lufthansa Group and Air France-KLM (in that order).

Nevertheless, costs have continued to run at higher percentages of 2019 levels than revenue has. Cutting capacity is easier than cutting cost - particularly labour - and losses are forecast for Europe's airline industry into 2022, albeit at narrower levels. Only the more domestic-focused North American airline industry is expected to return to profit in 2022 (North Atlantic reopening is an additional boost).

Among Europe's leading legacy groups, IAG does not have state-backed debt to repay, giving it more flexibility than Air France-KLM and Lufthansa Group.