The International Air Transport Association has announced an expected strengthening of airline industry profitability in an upgrade of its outlook for 2023.
According to the Director-General, IATA, Willie Walsh, at the 79th Annual General Meeting and World Air Transport Summit held in Istanbul, Turkey
He said, “Airline industry operating profits are expected to reach $22.4bn in 2023, much improved over the December forecast of a $3.2bn operating profit. It is also more than double the $10.1bn operating profit estimated for 2022.”
According to IATA data released at the summit, some 4.35 billion people are expected to travel in 2023, which is closing in on the 4.54 billion who flew in 2019.
It added, “Cargo volumes are expected to be 57.8 million tonnes, which has slipped below the 61.5 million tonnes carried in 2019 with a sharp slowing of international trade volumes.
“Total revenues are expected to grow 9.7 per cent year over year to $803bn. This is the first time that industry revenues will top the $800bn mark since 2019 ($838bn). Expense growth is expected to be contained to an 8.1 annual increase.”
Walsh also said, “Airline financial performance in 2023 is beating expectations. 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.”
He added, “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% 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,” said Walsh.