The International Air Transport Association (IATA) expects a return to profitability for the global airline industry in 2023 as airlines continue to cut losses stemming from the effects of the COVID-19 pandemic to their business in 2022.
In 2023, airlines are expected to post a small net profit of $4.7 billion—a 0.6% net profit margin. It is the first profit since 2019 when industry net profits were $26.4 billion (3.1% net profit margin).
This expected improvement comes despite growing economic uncertainties as global GDP growth slows to 1.3% (from 2.9% in 2022).
IATA projects the passenger business to generate revenues of $522 billion. Passenger demand is expected to reach 85.5% of 2019 levels over the course of 2023.
Passenger numbers are expected to surpass the four billion mark for the first time since 2019, with 4.2 billion travelers expected to fly.
Cargo markets are expected to come under increased pressure in 2023. Revenues are expected to be $149.4 billion, which is $52 billion less than 2022 but still $48.6 billion stronger than 2019. With economic uncertainty, cargo volumes are expected to decrease to 57.7 million tonnes, from a peak of 65.6 million tonnes in 2021.
Overall costs are expected to grow by 5.3% to $776 billion. That growth is expected to be 1.8 percentage points below revenue growth, thus supporting a return to profitability.
African carriers are expected to post a loss of $638 million in 2022, narrowing to a loss of $213 million in 2023. Passenger demand growth of 27.4% is expected to outpace capacity growth of 21.9%. Over the year, the region is expected to serve 86.3% of pre-crisis demand levels with 83.9% of pre-crisis capacity.
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