The International Air Transport Association has upgraded its outlook for airline industry profitability in 2023, the organization announced Monday at its annual general meeting in Istanbul.
IATA now projects airline net profits to reach $9.8 billion in 2023, more than double the previous forecast of $4.7 billion from December 2022. The net profit margin is forecast to be 1.2 percent. Airline operating profits are projected to reach $22.4 billion in 2023, a significant jump from the December forecast of $3.2 billion and more than double the $10.1 billion operating profit estimated for 2022.
IATA now projects about 4.35 billion people will travel in 2023, which is “closing in” on the 4.54 billion who flew in 2019, according to IATA. Total airline revenue is projected to grow 9.7 percent year over year to $803 billion. This would be the first time that industry revenue topped the $800 billion mark since 2019, when it was $838 billion. IATA projects expenses to grow about 8.1 percent annually.
“After deep Covid-19 losses, even a net profit margin of 1.2 percent is something to celebrate,” IATA director general Willie Walsh said in a statement. “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.”
