IATA Sees Airlines Globally Returning to Profitability in 2023
North American carriers already profitable in 2022 >>
by: Harvey Chipkin
The International Air Transport Association (IATA) expects a return to profitability for the global airline industry in 2023, as carriers continue to cut losses to their business in 2022 stemming from the effects of the COVID-19 pandemic. In 2023, airlines are expected to post a small net profit of $4.7 billion — a 0.6% net profit margin. It is the first profit since 2019, when industry net profits were $26.4 billion (3.1% net profit margin).
In 2022, airline net losses are expected to be $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 realized in 2021 and 2020 respectively.
North American carriers are expected to realize profits of $9.9 billion in 2022 and $11.4 billion in 2023. In 2023, passenger demand growth of 6.4% is expected to outpace capacity growth of 5.5%. Over the year, the region is expected to serve 97.2% of pre-crisis demand levels with 98.9% of pre-crisis capacity.
Carriers in North America benefited from fewer and shorter-lasting travel restrictions than those in many other countries and regions. This boosted the large US domestic market, as well as international travel, notably across the Atlantic.
In a statement, Willie Walsh, director general of IATA, said resilience has been the hallmark for airlines in the COVID-19 crisis. He said that while many carriers are doing well, many others are struggling because of onerous regulation, high costs, inconsistent government policies, inefficient infrastructure and “a value chain where the rewards of connecting the world are not equitably distributed.”