Recent data suggests airlines worldwide will see the first industry-wide profit since 2019 as more destinations open to international tourism and leisure travel continue to rebound.
The International Air Transport Association (IATA) estimates a net profit of $4.7 billion for the industry in 2023, with more than four billion passengers expected to travel via commercial airlines. In 2019, industry net profits were $26.4 billion.
IATA officials said net losses for 2022 are expected to be $6.9 billion, a massive decrease from losses of $42 billion and $137.7 billion in 2021 and 2020, respectively. Passenger revenues grew to $438 billion (up from $239 billion in 2021), while overall revenues jumped by 43.6 percent compared to 2021, reaching an estimated $727 billion.
Despite rising costs, labor shortages, strikes, operational disruptions, growing economic uncertainty and continued travel restrictions in China, the airline industry will end the year at about 70 percent of 2019 passenger volumes.
“Many airlines are sufficiently profitable to attract the capital needed to drive the industry forward as it decarbonizes,” IATA Director General Willie Walsh said. “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.”
As for the North American region, carriers are expected to report profits of $9.9 billion in 2022 and $11.4 billion in 2023. In 2023, passenger demand growth of 6.4 percent is expected to outpace capacity growth of 5.5 percent.
Over the year, the region is expected to serve 97.2 percent of pre-pandemic demand levels with 98.9 percent of pre-crisis capacity. Airlines benefitted from fewer and shorter-lasting travel restrictions than many other countries and regions, which boosted the large U.S. domestic market and international travel.
Earlier this week, the IATA found that total traffic in October rose 44.6 percent compared to the same month in 2021, with international traffic now at 74.2 percent of October 2019 levels.
North American carriers reported a 106.8 percent traffic rise in October versus the 2021 period, with capacity increasing 54.1 percent and load factor climbing 21.4 percentage points to 83.8 percent.
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