Airlines are set to significantly close the gap to pre-pandemic passenger figures this year, with global net sector profits now forecast to hit US$9.8bn, up from US$4.7bn originally.
According to the International Air Transport Association (IATA), global passenger numbers should hit 4.35bn in 2023, just 4% off the 4.54bn recorded in the year before Covid-19 hit.
As a result, operating profits of US$22.4bn could dwarf the trade body’s December estimate of US$3.2bn, the group unveiled at an annual meeting, translating to a margin of 1.2% - the first positive reading since 2019.
China’s easing of Covid restrictions and subsiding fuel prices are key reasons for the dramatic uptick in full-year forecasts, IATA director general Willie Walsh explained.
“Airline financial performance in 2023 is beating expectations,” he added, “economic uncertainties have not dampened the desire to travel”.
British Airways owner International Consolidated Airlines Group SA (LSE:IAG) is among those anticipating a jump in earnings for the year, updating in early May that profit should exceed previous guidance of up to €2.3bn.
Value carrier easyJet PLC forecast an £80mln-plus pre-tax profit for the year in interim results meanwhile, having hinted in January that the figure could even outdo market expectations of £126mln.
Rival Ryanair Holdings PLC (LSE:RYA) has already posted a €1.43bn after-tax profit for 2023, anticipating as early as May that the coming 12 months should bring a “modest year-on-year profit increase”.
Outside of the UK, Etihad and Emirates have both posted record-breaking profits in the past year, with the former scoring US$296mln in the first half and latter reporting US$2.9bn for 2023.
“The return to net profitability […] is a major achievement,” Walsh continued.
“First, it was achieved at a time of significant economic uncertainties. And second, it follows the deepest losses in aviation’s history,” which sat at $183.3bn between 2020 and 2022.
Wizz Air Holdings PLC (AIM:WIZZ) will be the latest London-listed airline to report earnings on Thursday, 8 June, having already tipped investors that 2023 will bring a net loss.
However, setting sights on a profitable 2024, Wizz has already anticipated a return to pre-pandemic passenger figures this summer, supported by a 22% yearly growth in May.