Airlines are expected to return to profit next year for the first time since 2019, before the Covid pandemic caused havoc in the travel sector, an industry group said Tuesday.
After cutting losses this year, airlines are expected to make $4.7 billion in net profits in 2023, according to the International Air Transport Association (IATA). This is still far off the $26.4 billion profit the industry reported in 2019, before Covid prompted countries to enact travel restrictions.
"Resilience has been the hallmark for airlines in the Covid-19 crisis," IATA director general Willie Walsh said in a statement.
"As we look to 2023, the financial recovery will take shape with a first industry profit since 2019. That is a great achievement considering the scale of the financial and economic damage caused by government imposed pandemic restrictions," he said.
Airlines are expected to post $779 billion in revenues in 2023. Walsh said many airlines are "sufficiently profitable" to attract capital as the industry seeks to decarbonise its operations.
But many others are struggling due to "onerous regulation, high costs, inconsistent government policies, inefficient infrastructure and a value chain where the rewards of connecting the world are not equitably distributed," he said.
Passenger traffic was slightly lower than forecast in 2022 due to slowing economies and China's zero-Covid restrictions. But the IATA expects passenger traffic to return to 85.5 percent of its pre-crisis level in 2023.