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IATA Projects Significant Airline Profitability Surge in 2023 as Passenger Numbers Approach Pre-Pandemic Levels

November 1, 2023
Picture: Southwest Airlines

A resurgence in passenger numbers has propelled air travel almost back to pre-Covid-19 levels, according to the latest data released by IATA.

The IATA's report, unveiled at its 2023 annual general meeting in Istanbul, Turkey, paints an optimistic picture. It reveals that airlines anticipate carrying approximately 4.35 billion passengers worldwide this year, inching closer to the previous record of 4.54 billion passengers set in 2019, before the pandemic's onset.

The severe impact of Covid-19 restrictions on international travel in early 2020 heavily affected airlines and the tourism sector alike. The road to recovery has been challenging, but the resilience of the industry is coming to the forefront.

Moreover, the IATA's revised forecast for profitability in 2023 presents a significant upward revision. The organization now anticipates net profits for the airline industry to reach $9.8 billion this year, indicating a profit margin of 1.2 percent. This is a substantial shift from its earlier projection of a net profit of $4.7 billion, as of December.

While the operating margins for the industry will remain relatively low at 1.2 percent, these projected profits mark a remarkable improvement from the staggering $42 billion loss in 2021 and the even more challenging scenario of 2020, with losses amounting to $137.7 billion.

However, IATA cautioned that not all geographic regions will return to profitability this year. While airlines in North America, Europe, and the Middle East are poised to see substantial profits, the Asia-Pacific region (-$6.9 billion), Latin America (-$1.4 billion), and Africa (-$500 million) are expected to continue operating at a deficit.

As the aviation industry continues to navigate its recovery journey, the IATA's latest projections provide a glimmer of hope and resilience amid a challenging landscape. The substantial improvements underscore the industry's determination to adapt, innovate, and emerge stronger from the global crisis.

Source: Euronews.

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