The International Air Transport Association boss said there are “many good reasons for optimism” as the organisation has more than doubled its forecast for the sector’s profits in 2023.
Airline industry net profits are expected to reach $9.8 billion in 2023 – representing a 1.2% net profit margin – which is more than double the previous forecast of $4.7 billion in December 2022.
About 4.35 billion people are expected to travel in 2023, which is close to the 4.54 billion who flew in 2019.
Total revenues are expected to grow 9.7% year on year to $803 billion. This is the first time that industry revenues will top the $800 billion mark since 2019 ($838 billion).
Willie Walsh, Iata director general, said: “Resilience is the story of the day and there are many good reasons for optimism.
“Achieving profitability at an industry level after the depths of the Covid-19 crisis opens up much potential for airlines to reward investors, fund sustainability, and invest in efficiencies to connect the world even more effectively.
“That’s a big ‘to do’ list to achieve with just a 1.2% net profit margin. That’s why we call on governments to keep their focus on initiatives that will strengthen safe, sustainable, efficient, and profitable connectivity.”
He pointed to several reasons for the optimism, including China lifting Covid-19 restrictions earlier than anticipated and the moderation of jet fuel prices.
“Economic uncertainties have not dampened the desire to travel, even as ticket prices absorbed elevated fuel costs,” he said.
“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.”