Airlines set for first profit since 2019 next year

Global airlines are forecast to return to profit for the first time since 2019 next year, as the industry recovers from the impact of the Covid pandemic and demand for travel remains strong despite a weakening economy. The IATA, an industry body, on Tuesday said it expected airlines to report a net profit of $4.7b in 2023, after racking up more than $185b of losses during the previous three years of limited flying because of government travel restrictions. Willie Walsh, Iata’s DG and a former boss of British Airways, said the economic recovery highlighted the airline industry’s “resilience”. “The expected profits for 2023 are razor thin. But it is incredibly significant that we have turned the corner to profitability . . . the industry has great capability to adjust to fluctuations in the economy,” he said. Passengers rushed back to the skies as border restrictions eased across most countries this year, and demand is expected to hit 85.5% of 2019 levels in 2023, up from 70% this year. Still, Walsh warned there was still “much more ground to cover” to put the industry “on a solid financial footing”. With the sector’s profitability historically reliant on a clutch of North American and European carriers, Walsh said many other airlines were still “struggling” with high costs including fuel, “onerous” regulation and inefficient infrastructure. Airlines in Africa, Latin America and Asia-Pacific are forecast to post losses in 2023, and Iata said China’s zero-Covid policies had “critically held back” the recovery of air travel across Asia. Globally, airlines are expected to post the $4.7b profit on $779b in revenues, a net profit margin of just 0.6%, down from 3.1% in 2019.<br/>