The airline industry’s primary trade body has doubled its global profit outlook for the sector this year to nearly $10bn (£8bn), as travel restrictions have all but disappeared and the world returns to international travel after the Covid-19 pandemic.
Global airlines are predicted to see total revenues of $803bn (£648bn), according to the International Air Transport Association (IATA), but cautioned that margins are “wafer thin” with airlines making just $2.25 (£1.82) per passenger.
Separately, ratings agency Moody’s upgraded British Airways’ owner IAG’s outlook from stable to positive, stating that “current positive trends, including strong bookings and yields for Q2 and lower than expected fuel prices, will lead to stronger credit metrics for IAG in 2023 than previously expected”.
Willie Walsh, the director-general of IATA, declared today that “the pandemic years are behind us.”
“Despite economic uncertainties, people are flying to reconnect, explore, and do business,” Walsh said at the aviation body’s annual general meeting today.
“Airports are busier, hotel occupancy is rising, local economies are reviving, and the airline industry has moved into profitability,” he said.
The forecasts come as the global aviation industry anticipates a booming period of summer travel, with the sector finally approaching pre-pandemic profits on the back of surging demand. Global passenger traffic is currently at over 90 per cent of 2019 levels.
Walsh, however, stressed that “challenges remain” for the sector, including stubborn inflation, a shortage in labour supplies and a continued slump in business travel.
The aviation chief told reporters that changes to business travel caused by the pandemic had been “more structural” than expected.
A report in March from Consultancy UK, found that demand for business travel had shrunk by one-third in a number of leading European economies post-pandemic.
Despite this, Walsh remained optimistic about its ability to recover.
“Going into this pandemic based on previous experience, we would have expected to see a much stronger reduction and much slower recovery. It’s actually recovered faster than I believed it would, but it’s still… well below where it was in 2019,” he said.
IATA’s annual general meeting was held at the World Air Transport Summit 2023 in Istanbul this year, which involved more than 300 airlines and is the first meeting since Covid-19 pandemic hit.