Airline industry profitability is expected in 2023 as it continues to cut losses from the pandemic. Airlines industry body said a small net profit of $4.7 billion is expected—the first profit since 2019 when industry net profits were $26.4 billion.
Industry body IATA said on December 6, that the airline industry will bounce back from losses and become profitable again next year for the first time since 2019 after the COVID-19 restrictions for two years in air travel backfired and caused cost cuts.
The statement released by the International Air Transport Association said that the global airline industry is projected to report a lower loss at USD 6.9 billion in 2022 , as airlines will maintain stronger passenger yields and cost control by carriers by keeping an eye on rising fuel prices.
Airlines have struggled to cope with the loss of tens of billions of dollars in 2020 and 2021 due to the pandemic but now have partially recovered.
IATA has earlier said that profits were “within reach” for 2023. It has now said it expects a net profit of $4.7 billion for the industry next year, as more than 4 billion passengers are set to fly.
Willie Walsh, IATA’s Director General said, “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 its decarbonizer. 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.”
IATA’s forecast is based on the changes in post-COVID ease of restrictions in air travel and reopening of China to international traffic. But if it does not happen, IATA said the loss will continue. Economies falling into recession is also a condition which may risk airline profitability.