GENEVA: The airline industry will become profitable again next year for the first time since 2019 as a snapback in air travel continues following nearly two years of COVID-19 restrictions, an industry association said on Tuesday.
Airlines lost tens of billions of dollars in 2020 and 2021 due to the pandemic but air travel has partially recovered and some airports have struggled to cope.
The International Air Transport Association (IATA) now expects a net profit of $4.7 billion for the industry next year, with more than 4 billion passengers set to fly. It had previously said only that profits were “within reach” in 2023.
For 2022, IATA narrowed its forecast for industry-wide losses to $6.9 billion from $9.7 billion. “That is a great achievement considering the scale of the financial and economic damage caused by government imposed pandemic restrictions,” said IATA Director General Willie Walsh, commenting on the projected return to profit in 2023.
But the former British Airways and IAG boss warned that many airlines will continue to struggle next year, citing regulations, high costs, inconsistent government policies among the factors.
“Airlines must remain vigilant to any increases in taxes or infrastructure fees,” he said, adding these included those made “in the name of sustainability”.
IATA said that its forecast is based on a gradual reopening of China to international traffic and the easing of domestic zero-COVID restrictions.
If that does not happen, airlines’ profitability would be affected.
Another risk for the 2023 outlook is that some economies fall into recession, it said.