Global airlines should make nearly $10 billion in profit this year as business bounces back from the pandemic, according to a new forecast from the International Air Transport Association (IATA).
IATA on Monday more than doubled its 2023 profit forecast for the global airline industry despite a looming economic downturn. Airlines are expected to make $9.8 billion in net profit in 2023, up from a December forecast of $4.7 billion.
Stronger profitability was supported by cargo revenues, China's reopening and lower jet fuel prices, IATA's director general Willie Walsh said in a statement.
The industry's main lobby group expects 4.35 billion people to travel by air this year, not far off the 4.54 billion passengers who flew in 2019.
The figures mark a significant turnaround for the airline industry, which carried just 1.8 billion passengers in 2020 because of the coronavirus pandemic, at a loss of $76 per traveler. All told, the aviation industry suffered net losses of $183 billion between 2020 and 2022 as lockdowns hit travel.
From that nadir, air travel has rebounded even as high inflation and rising interest rates weigh on spending by businesses and consumers in other areas.
"Despite economic uncertainties, people are flying to reconnect, explore, and do business," Walsh said during a speech at IATA's annual meeting in Istanbul. "Airports are busier, hotel occupancy is rising, local economies are reviving, and the airline industry has moved into profitability."
Notwithstanding the sunnier outlook, profit margins remain "wafer thin," Walsh added. "Repairing damaged balance sheets and providing investors with sustainable returns on their capital will continue to be a challenge for many airlines," he added.
Walsh pointed out that airlines would make $9.8 billion in profit off $803 billion of revenue — in other words, netting just $2.25 per passenger.
Still, that's cause for celebration, following years of "eyewatering" losses, he told CNN's Richard Quest.
"The fact that the industry could survive that demonstrates the resilience and determination and the actions that have been taken" Walsh said, adding "we're fully acknowledging challenges but we're still quietly confident about the future."
— Gayle Harrington contributed reporting.