The trade association of world airlines, the International Air Transport Association (IATA), has forecast a return to profitability for the global airline industry in 2023, a good two years since the industry which has been reeling from the aftereffects of Covid-19 pandemic.
The Geneva-headquartered association also expects airlines to post a small net profit of $4.7 billion at a 0.6 per cent net profit margin. It will be the first profit earned by the airline industry since 2019 when net profits stood at $26.4 billion or 3.1 per cent net profit margin.
The airline industry losses for 2022 are expected to be $6.9 billion, which is an improvement from the $9.7 billion loss for 2022 in IATA’s June 2022 outlook. This is significantly better than losses of $42 billion and $137.7 billion realised in 2021 and 2020, respectively.
“As we look to 2023, the financial recovery will take shape with a first industry profit since 2019. 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, in an official statement.
He, however, was quick to caution that a $4.7 billion profit on industry revenues of $779 billion also illustrated that a lot of ground remained to be covered to return the industry to a sound financial footing.
“Many airlines are sufficiently profitable to attract the capital needed to drive the industry forward as it decarbonises. But many others are struggling for a variety of reasons. These include onerous regulation, high costs, inconsistent government policies, inefficient infrastructure and a value chain where the rewards of connecting the world are not equitably distributed,” opined Walsh.
The prospect of some economies entering into a recession, a prolongation of China’s Zero Covid policies and proposals for increased infrastructure charges or taxes to support sustainability efforts pose significant risks to the outlook.
The findings are based on an opinion survey commissioned by IATA in November in 11 markets including Chile, the US, Canada, the UK, France, Germany, the UAE, India, Singapore, Australia and Japan. It was conducted independently by the UK-based market research agency Motif and polled a total of 4,700 respondents.
IATA represents some 300 airlines comprising 83 per cent of global air traffic.
SOURCE – businesstoday.in/ click to read news at the source
