The global airline industry is forecast to achieve a net profit of $4.7 billion in 2023 as the recovery from the Covid-19 crisis continues, according to IATA.

That would mark the industry’s first positive result since the pandemic hit in 2020, with airlines on course for a loss of $6.9 billion in 2022.

Releasing its latest forecast on 6 December, the airline industry association says that the North America region – which it says will already be profitable in 2022 – will be the main driver of the profitability next year.

Small profits are expected in the Europe and Middle East regions, but the huge Asia-Pacific market is expected to stay in the red, alongside Latin America and Africa.

IATA net result/forecast by region (2019-2023)

North America $17.4bn -$35.1bn -$2.3bn $9.9bn $11.4bn
Africa -$0.3bn -$1.8bn -$1.1bn -$0.6bn -$0.2bn
Asia-Pacific $4.9bn -$45.0bn -$14.8bn -$10.0bn -$6.6bn
Latin America -$0.7bn -$11.9bn -$7.0bn -$2.0bn -$0.8bn
Middle East -$1.5bn -$9.4bn -$4.7bn -$1.1bn $0.3bn
Europe $6.5bn -$34.5bn -$12.1bn -$3.1bn $0.6bn
Total $26.4bn -$137.7bn -$42.0bn -$6.9bn $4.7bn

IATA director general Willie Walsh describes the profit forecast as a “great achievement” for the industry, given the scale of “financial and economic damage” seen as a result of pandemic-related travel restrictions over the past three years.

Walsh highlights, however, that a $4.7 billion profit on forecast revenues of $779 billion shows there is “much ground to cover” to put the industry on a “solid financial footing”, describing airline profitability as “razor thin”.

Willie Walsh IATA

Source: BillyPix

He predicts “major challenges” for some airlines, saying there is ”a lot of damage to balance sheets that will need to be repaired”.

He also urges airline managements to keep a “careful watch” on economic uncertainties.

Nevertheless, despite the slowing global economy and challenges such as rising inflation, “there are plenty of reasons to be optimistic about 2023”, Walsh says.

IATA forecasts that global passenger demand is expected to reach 85.5% of 2019 levels in 2023, from an estimation of 70.6% in 2022. 

The uncertainties created by Covid-19 policies in the huge China market are weighing on the global demand recovery, IATA notes.

Cargo markets are expected to come under “increased pressure” in 2023, with forecast revenue of $149.4 billion down $52 billion on 2022 but still up $48.6 billion from 2019.