By Joanna Plucinska and Aditi Shah
ISTANBUL (Reuters) – Global airlines more than doubled their 2023 industry profit forecast to $9.8 billion from $4.7 billion on Monday cheered by strong travel demand as the sector recovers from the COVID-19 pandemic.
“The pandemic years are behind us and borders are open as normal,” Director General Willie Walsh told the annual meeting of the International Air Transport Association (IATA).
Global airlines have in recent months reported strong results as they prepare for a busy summer season, with travel demand showing no sign of flagging despite peaking inflation.
Pressure from oil prices has also eased this year.
Revenue levels for 2023 are also inching closer to pre-pandemic levels, climbing to an expected $803 billion versus $838 billion in 2019.
“A lot of people not just have to travel, but want to travel. And they will continue to do so through this year,” Walsh told Reuters in an interview separately.
Demand is being lifted by high levels of employment even with a weaker macroeconomic outlook, he said.
“That tends to give consumers confidence that they can spend money, that they can incur some debt to continue to enjoy what it is they’re doing.”
Still, Walsh told delegates from some 300 airlines that the industry’s level of profitability industry’s current low level of profitability was not sustainable.
Despite the strong rebound, he said the sector was achieving a profit of about $2.25 per passenger, “which is less than the price of a cup of coffee, a subway ticket”.
(Reporting by Joanna Plucinska, Aditi Shah; editing by Tim Hepher and Jason Neely)
