For the first time in four years, 2023 is expected to be a year of profits for airlines, the International Air Transport Association (IATA) has revealed.
In a forecast published on Tuesday, December 6, IATA has estimated that next year airlines are foreseen to post a small net profit of $4.7 billion, VisaGuide.World reports.
According to IATA, since 2019, when the industry’s net profits were $26.4 billion or a 3.1 percent net profit margin, this will be the first profit recorded.
On the other hand, during this year, the net losses of the airlines are expected to reach $6.9 billion, which, as explained by IATA, is much better than the loss of $42.0 billion and $137.7 billion that were recorded, respectively a year ago and in 2020.
“Resilience has been the hallmark for airlines in the COVID-19 crisis. As we look to 2023, the financial recovery will take shape with the first industry profit since 2019. That is a great achievement considering the scale of the financial and economic damage caused by government-imposed pandemic restrictions,” IATA’s Director General Willie Walsh pointed out in this regard.
Walsh also added that a gain of $4.7 billion on industry income of $779 billion also demonstrates that there is much more ground to cover to put the global industry on a sound financial footing.
According to him, many airlines are profitable enough to pull the capital needed to force the industry forward as it decarbonizer. He also noted that many others are struggling for all sorts of reasons, including burdensome rules, huge costs, inconsistent government policies, inefficient infrastructure, and a chain where the benefits of connecting the world are not evenly distributed.
Moreover, since the reopening of borders, consumer demand for air travel has increased, as has a strong US dollar that has encouraged more Americans to travel overseas. At the same time, Corporate Tours has also made a strong comeback.
In addition, constraints remain on the supply of flights, including delayed aircraft deliveries, pilot shortages, and airport infrastructure issues.
Even though a global economic downturn is approaching, the industry remains optimistic.
Commenting on this situation, Delta Air Lines CEO Ed Bastian said that while they are aware of the macroeconomic headwinds, the travel industry is also experiencing a countercyclical recovery.
CEO Bastian also stated that the reason global demand continues to grow is that consumers are shifting spending towards experiences, businesses are turning to travel, and international markets are continuing to reopen.
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