After two very negative pandemic years due to airport closures and declining tourism, airline profits have returned, smashing all forecasts. Companies in the industry forecast a net profit of $9,800 million In 2023 (9,165.45 million euros), it was double what the International Air Transport Association (IATA) had previously estimated, which had forecast a profit of 4,700 million (4,395 million euros). At its annual summit in Istanbul this year, the association wanted to emphasize that the profitability of the aviation industry has strengthened compared to what was expected in 2022, when inflation and jet fuel prices rose due to the outbreak of war in Ukraine. pointed to the increase in costs passed to the consumer. And at this point, the association’s president, Willie Walsh, has calculated that ticket prices have become more expensive by 33% worldwide due to the increase in taxes and fees incurred by airlines.
There are many positive factors that increase the financial results of airlines, but the lifting of restrictions in China has undoubtedly been the most comforting for the sector, both in the passenger and commercial areas. Walsh also stressed that although we have to wait for the reaction of the markets due to OPEC’s decision to extend the oil cut until the end of the year, the costs have also decreased due to the “softening” fuel prices in the first half. 2024. No surprise, IATA calculates it sector revenues reached 803 billion dollars (EUR 776,500 million), 9.7% more than in 2022 and 4.1% less than in 2019, while operating profit exceeded $22,400 million (EUR 20,940 million) above the previous forecast of $3,200 million (EUR 2,992 million). It will be pretty high.
But there is better news. The recovery of tourism worldwide is why IATA estimates this. approximately 4,350 million people travel this yearNearly 4,540 million flights were recorded in 2019, and 34.4 million flights were made, 24.4% more than in 2022 and 11.5% less than before the pandemic. According to these figures, airlines expect to return to profitability in 2023, although some regions such as Asia-Pacific, Latin America and Africa will still not be profitable this year. On the other hand, as a reflection of the sharp slowdown in international trade volumes due to inflation and interest rate hikes, air cargo volumes are expected to reach 57.8 million tons in 2019, slightly below the 61.5 million tons transported.
In Europe, forecasts are positive again after returning to snow in 2022. Despite the various strikes, the impact of the war in Ukraine and the macroeconomic context, the forecast is that Old Continent’s airlines make $5,100 millionWith 6% fewer passengers and 2% less capacity compared to 2019. The Middle East will remain “green” with an estimated $2 billion benefit from increased capacity, and North America will be 2% above pre-pandemic level, with an estimated $11.5 billion for carriers in the region.
“The costs of your inefficiency”
Taking advantage of his speech, Walsh criticizes some airports for blaming “the airlines for their inefficiency” and specifically chooses the Dutchman from Schiphol (Amsterdam). “Following a self-inflicted operational disaster in 2022, Schiphol Airport continues its three-year fare increase of 37% and rises to 12% in 2023,” he said. in Europe itAirlines pay another 1.9 billion euros As IATA emphasized, air traffic management in 2022 has tripled its cost base, thus delays, and environmental and capacity targets have not been met. In this sense, the president of the association advocates the implementation of global standards such as verifiable digital identities, which are currently being developed.
Likewise, the international association noted more than 100 jurisdictions developed to protect travelers. European passenger rights regulation EU 261which he called “infamous” for penalizing airlines for disruptions without realizing the high costs of not operating as planned.
Advances in sustainability
With the latest policies pushing the aviation industry to decarbonize by 2050, the development of sustainable aviation fuel (SAF) is more important than ever. The problem is production. According to Walsh, although the trend is positive and production will triple to 300 million liters in 2022, it still does not exceed 0.1% of what is needed to achieve zero emissions. Airlines have already started to include it in their engines, but IATA stated that the liters produced are still not enough to meet the demand, so the number of flights and the diversification of raw materials should be increased.