However, the industry is seen to be treading on thin ground. While 2023 might be a profitable year, Iata estimates the industry’s profit margin at just 0.6%. A slight increase in costs — or a dip in revenue — can potentially send the industry back into loss-making territory again. “Vigilance and flexibility will be key,” warns Willie Walsh, Iata’s director general.
After almost three years of losses, the airlines are finally turning a corner as they pull up from the woes of the pandemic years. On Dec 6, the International Air Transport Association (Iata) expects the global airline industry to return to make a profit of US$4.7 billion ($6.36 billion) this coming 2023 — the first time since the pre-pandemic year of 2019. The industry will end with a net loss of US$6.9 billion for the current year.
While the global economy is slowing down with inflationary pressures and broader uncertainties, Iata says there are reasons to be optimistic about 2023, with lower oil price inflation to help keep costs in check while pent-up demand continues to generate substantial revenue growth.
