‘Airline sweet spot may have got sweeter’: IATA chief economist

The global airline industry’s fortunes have improved since IATA’s mid-year financial forecast for the industry, according to the association’s chief economist Marie Owens Thomsen, with positive factors continuing to more than offset negative ones. Speaking to FlightGlobal at the IATA World Sustainability Symposium in Madrid on 3 October, Owens Thomsen cited a stronger-than-expected recovery in global airline traffic, saying that the “sweet spot” the industry was in earlier this year is “maybe even sweeter” today. By the end of this year, “almost everybody will be back to 2019 levels except China”, she says of the global traffic recovery to pre-Covid levels, which IATA expects to be achieved on a whole-industry basis in 2024. IATA’s latest traffic and capacity data – released on 4 October – shows that in August this year, global revenue passenger kilometres were at 95.7% of 2019 levels, with available seat kilometres at 96.9%. Within those figures, North American and Latin American airlines were already exceeding 2019 traffic, with every other region within a single-digit percentage point of doing the same. That strong traffic trend is one contributing factor to IATA’s likely upgrading of its projection that the industry will achieve a net profit margin of 1.2% this year, Owens Thomsen says. Other factors continue to underpin that performance, she states, crucially including relatively low unemployment rates globally, despite economic challenges, which are proving to be a “greater positive than the negative effect of the high inflation rates”, she explains. “Certainly in my 30 years in finance as a macro-economist I have never seen anything like it,” she says, comparing today’s “jobs rich” recovery with the “jobless” recovery that followed the financial crash in 2008. “As long as people are earning an income, they can still fly,” she says. <br/>