The International Air Transport Association (IATA) has published a revised outlook for 2023, with airline profits set to be higher than originally forecast, and the number of people taking flights closing in on pre-pandemic levels.
The association said that airline industry net profits are expected to reach $9.8 billion this year, more than double the previous forecast of $4.7 billion which was published in December 2022.
IATA also said that it now expects 4.35 billion people to fly in 2023, not far off the 4.54 billion people who took a flight in pre-pandemic 2019.
Polling carried out last month indicates that more than three quarters (77 per cent) of respondents are now travelling as much or more than they did before Covid-19.
Last month aviation analytics firm Cirium published new analysis showing that global airline passenger traffic could surpass 2019 levels before the end of the year.
And International Airlines Group (IAG) recently said it expects capacity to be around 97 per cent of 2019 levels for the full year.
The group reported a first quarter profit for the first time since 2019, following what it said had been a “stronger performance than expected at every airline”.
“Airline financial performance in 2023 is beating expectations,” said Willie Walsh, IATA’s Director General.
“Stronger profitability is supported by several positive developments. China lifted Covid-19 restrictions earlier in the year than anticipated. Cargo revenues remain above pre-pandemic levels even though volumes have not. And, on the cost side, there is some relief. Jet fuel prices, although still high, have moderated over the first half of the year.”
“Economic uncertainties have not dampened the desire to travel, even as ticket prices absorbed elevated fuel costs. After deep Covid-19 losses, even a net profit margin of 1.2 per cent is something to celebrate!
“But with airlines just making $2.25 per passenger on average, repairing damaged balance sheets and providing investors with sustainable returns on their capital will continue to be a challenge for many airlines.”