The global aviation industry is expected to return to profitability in 2023 with carriers likely to post a $4.7 billion net profit, aviation body International Air Transport Association (IATA) said on Tuesday, with passenger demand expected to reach 85.5 per cent of 2019 levels over the course of next year.
As many as 4.2 billion passengers are expected to fly over the course of next year – the first time since 2019 that the 4 million mark will be crossed, IATA added.
This will also be the first profit since 2019, when industry’s net profits stood at $26.4 billion.
Meanwhile, airlines are expected to trim their net losses for 2022 at $6.9 billion, an improvement on the $9.7 billion loss for 2022 in IATA’s June outlook. This is significantly better than losses of $42 billion and $137.7 billion that were realised in 2021 and 2020, respectively.
“Resilience has been the hallmark for airlines in the COVID-19 crisis. As we look to 2023, the financial recovery will take shape with a first industry profit since 2019. That is a great achievement considering the scale of the financial and economic damage caused by government imposed pandemic restrictions,” said IATA’s Director-General Willie Walsh.
“But a $4.7 billion profit on industry revenues of $779 billion also illustrates that there is much more ground to cover to put the global industry on a solid financial footing. Many airlines are sufficiently profitable to attract the capital needed to drive the industry forward as it decarbonises. But many others are struggling for a variety of reasons. These include onerous regulation, high costs, inconsistent government policies, inefficient infrastructure and a value chain where the rewards of connecting the world are not equitably distributed.”
Improved prospects for 2022 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 the 5.6 per cent anticipated in June). Propelled by that strength, passenger revenues are expected to grow to $438 billion (up from $239 billion in 2021).
Air cargo revenues played a key role in cutting losses with revenues expected to reach $201.4 billion. That is an improvement compared with the June forecast, largely unchanged from 2021, and more than double the $100.8 billion earned in 2019.
Overall revenues are expected to grow by 43.6 per cent compared to 2021, reaching an estimated $727 billion.