IATA predicts $4.7 billion profit for the global airline industry in 2023
The International Air Transport Association (IATA) have published their semi-annual report on the Global Outlook for Air Transport. The report takes a broad look at developments in the airline industry, the context in which it is operating, and the challenges it is facing.
There is one prediction in the report that stands out.
“The air transport industry will likely post a loss of nearly USD 7 billion in 2022 and deliver a profit of USD 4.7 billion in 2023. This is a remarkable performance given the USD 128 billion loss seen in 2020.”
Here are the key insights from the report supporting this prediction.
Breaking down the forecast into regions, the disparity in travel recovery rates are highlighted. Although all regions are expected to see their finances improve in 2023, the rate of recovery is not even.
The financial recovery of the sector is predicted to be led by North America which benefited from fewer and shorter restrictions on travel. Europe and the Middle East are also expected to deliver a profit in 2023, with the World Cup expected to soften this year’s losses for the latter.
The Asia-Pacific region continues to be restricted by ongoing lockdowns and pandemic related mobility restrictions. The report predicts a loss of USD 10 billion in 2022 followed by a loss of USD 6.6 billion in 2023. The industry in Latin America and Africa are also predicted to make a loss in 2023.
Tempering the forecast, the report highlighted risks that could impact these predictions. These included but are not limited to:
- Developments in the global macroeconomy
- Changes to the world oil price
- Escalations in geopolitical tensions
- The timing of the recovery of air transport demand in Asia Pacific
- Further disruptions to global supply chains
- Renewed outbreaks of Covid-19
Despite these caveats, as the industry suffers a third consecutive year of (net) loss, it is encouraging to see the prediction that 2023 will bring profit to the sector once again.
For more information specifically on the Asia Pacific region’s recovery watch this interview with Daniel Friedli. Aviation Festival Asia will explore the Asia Pacific region’s pandemic recovery in detail with industry leaders discussing their next steps at the event.
Article by Jess Brownlow