Airlines will make money again in 2023 as travel returns

London
CNN Business
—

The global airline industry is expected to return to profitability in 2023 for the first time in four years.

In a forecast released on Tuesday, the International Air Transport Association predicted that airlines will make a net profit of $4.7 billion, despite fears of a global recession.

It would be the first time the sector has made money since 2019, as airmen return to the skies after years of Covid-19 restrictions that reduced flight demand.

The industry association also said net losses for 2022 are expected to be $6.9 billion. That’s less than he had previously forecast and “significantly better” than 2021 and 2020.

Willie Walsh, IATA’s chief executive, called the screening a “great achievement”. But the industry still has work to do to shore up its financial position, he said.

“A profit of $4.7 billion on industry revenue of $779 billion also illustrates that there is much more to do to put the global industry on a solid financial footing,” said- he declared.

Consumer demand for air travel has been boosted by the reopening of borders closed by the pandemic, as well as a strong US dollar which has encouraged more Americans to travel abroad. Business travel has also made a comeback.

At the same time, constraints remain on flight supply, including delayed aircraft deliveries, pilot shortages and airport infrastructure problems.

Nevertheless, the industry is increasingly optimistic, even as a global economic slowdown looms.

“While we are mindful of the macroeconomic headwinds, the travel industry is experiencing a countercyclical recovery,” Delta Air Lines CEO Ed Bastian said during the company’s October earnings release.

“Global demand continues to rise [up] as consumers shift spending toward experiences, businesses return to travel, and international markets continue to reopen.

— Chris Isidore contributed reporting.