Global airline industry more than doubles its profit forecast
The global airline industry has more than doubled its profit forecast for this year, with the sector’s trade body predicting net profits will rise to $9.8b on the back of a travel boom that has lifted carriers’ recent results. The sector has benefited from a resurgence in post-pandemic demand which has boosted both passenger numbers as well as freight at a time when fleet growth has been constrained by production difficulties at Boeing and Airbus. The forecast from the International Air Transport Association compares with net losses for the industry of $3.6b in 2022 and the trade association’s forecast in December of $4.7b in net profits for this year. Iata projected revenues for 2023 to rise 9.7% to $803b, topping the $800b mark for the first time since the pandemic forced carriers to slash capacity, leading to industry-wide losses. The organisation gave a particularly strong forecast for North American airlines, predicting that revenue passenger kilometres (RPKs) in the region would be 2% above the levels in 2019. RPKs measure the number of passengers carried multiplied by the distance each was carried. Worldwide, Iata predicted RPKs would reach 87.8% of the 2019 level. Willie Walsh, Iata’s DG, said that airline financial performance for the year was beating expectations, with stronger profitability supported by “several positive developments”. “China lifted Covid-19 restrictions earlier in the year than anticipated,” said Walsh, adding that cargo revenues remained above pre-pandemic levels although volumes had not. The improved profit outlook partly reflects Iata’s projection that costs will rise 8.1% compared with 2022, more slowly than projected revenues. “On the cost side, there is some relief,” added Walsh. “Jet fuel prices, although still high, have moderated over the first half of the year.” Leisure travel has rebounded far faster for most airlines than the business market, traditionally a strong driver of industry profits. Iata predicted passenger revenues for the industry in 2023 would be $546b, 27% up on 2022 levels but still 10% below the level reached in 2019. Walsh said there were many good reasons for optimism.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-06-06/general/global-airline-industry-more-than-doubles-its-profit-forecast
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Global airline industry more than doubles its profit forecast
The global airline industry has more than doubled its profit forecast for this year, with the sector’s trade body predicting net profits will rise to $9.8b on the back of a travel boom that has lifted carriers’ recent results. The sector has benefited from a resurgence in post-pandemic demand which has boosted both passenger numbers as well as freight at a time when fleet growth has been constrained by production difficulties at Boeing and Airbus. The forecast from the International Air Transport Association compares with net losses for the industry of $3.6b in 2022 and the trade association’s forecast in December of $4.7b in net profits for this year. Iata projected revenues for 2023 to rise 9.7% to $803b, topping the $800b mark for the first time since the pandemic forced carriers to slash capacity, leading to industry-wide losses. The organisation gave a particularly strong forecast for North American airlines, predicting that revenue passenger kilometres (RPKs) in the region would be 2% above the levels in 2019. RPKs measure the number of passengers carried multiplied by the distance each was carried. Worldwide, Iata predicted RPKs would reach 87.8% of the 2019 level. Willie Walsh, Iata’s DG, said that airline financial performance for the year was beating expectations, with stronger profitability supported by “several positive developments”. “China lifted Covid-19 restrictions earlier in the year than anticipated,” said Walsh, adding that cargo revenues remained above pre-pandemic levels although volumes had not. The improved profit outlook partly reflects Iata’s projection that costs will rise 8.1% compared with 2022, more slowly than projected revenues. “On the cost side, there is some relief,” added Walsh. “Jet fuel prices, although still high, have moderated over the first half of the year.” Leisure travel has rebounded far faster for most airlines than the business market, traditionally a strong driver of industry profits. Iata predicted passenger revenues for the industry in 2023 would be $546b, 27% up on 2022 levels but still 10% below the level reached in 2019. Walsh said there were many good reasons for optimism.<br/>
