Airlines return to profit as sales surpass pre-pandemic levels

Airlines have returned to profit and are forecasting that booming demand will push earnings even higher over the next year, in a striking turnround for one of the industries worst hit by the pandemic. The world’s largest airlines reported $6.3bn in net profit in 2022, a striking reversal from a combined $40bn in losses over the previous two years, according to a Financial Times analysis of FactSet and Capital IQ data. The figures cover eight of the 10 largest airlines by passenger numbers but exclude Chinese groups, which were still subject to travel restrictions in 2022. Sales in 2022 surpassed pre-pandemic levels, driven in particular by strong growth from Turkish Airlines and Indian carrier Indigo. People have flocked back to air travel as restrictions have ended over the past year, most recently in China, and there are few signs that worries about the economy will hold back demand in the coming months. Lufthansa on Friday became the latest airline to report an annual profit and strong demand for travel despite weaknesses in the global economy. “In just one year, we have achieved an unprecedented financial turnround,” said CE Carsten Spohr. The German flag carrier reported an operating profit of E1.5b for 2022, up from a E1.7b loss the previous year. Both revenues and passenger numbers roughly doubled. The airline said it expected “a significant improvement” in profitability this year as “demand for air travel remains high”. The results came on the same day that Australian airline Qantas said it expected to hire 8,500 people over the next decade to rebuild its workforce, having cut staffing significantly at the height of the pandemic. Air France-KLM and British Airways owner IAG have also reported a return to profit in recent weeks, and predicted that the recovery will continue.<br/>