Airline Industry's Net Profit to Hit $9.8 Billion in 2023
- June, 05, 2023 - 16:09
- Other Media news
TEHRAN (Tasnim) - Airline industry net profit is expected to reach $9.8 billion in 2023 with a 1.2 percent margin, which is more than double the previous forecast of $4.7 billion made in December 2022, the International Air Transport Association (IATA) said.
It said profitability is estimated to strengthen in 2023, driven by positive developments including increasing travel demand, Bernama reported.
IATA director-general Willie Walsh said this year’s financial performances are also beating expectations.
“The stronger profitability is supported by several positive developments. China lifted COVID-19 restrictions earlier than anticipated. Cargo revenues remain above pre-pandemic levels even though volumes have not. And on the cost side, there is some relief. Jet fuel prices, although still high, have moderated over the first half of the year,” Walsh said in a statement today.
Total revenue is expected to grow 9.7 percent year-on-year to $803 billion, the first time revenue is topping the $800 billion mark since 2019’s $838 billion.
IATA said passenger revenue is expected to reach $546 billion (+27 percent in 2022, -10 per cent in 2019).
With COVID-19 restrictions now removed in all major markets, the industry is expected to reach 87.8 percent of 2019 level of revenue passenger per kilometer for the year with stronger passenger traffic as the year progresses, it added.
IATA said the high demand for travel in many markets is keeping yields strong with a modest 1.1 percent decline expected in 2023 compared to 2022, following increases of 9.8 percent in 2022 and 3.7 percent in 2021.
For 2023, expense growth is expected to be contained with an 8.1 percent annual increase, said IATA.
Some 4.35 billion people are expected to travel in 2023, which is close to the 4.54 billion who flew in 2019.
Walsh said economic uncertainties have not dampened the desire to travel, even as ticket prices absorbed elevated fuel costs.