Global Airlines More Than Double 2023 Profit Forecast

Airlines from around the world announced the forecast for the industry’s 2023 profit has more than doubled despite issues meeting demand and delays associated with the delivery of new planes and parts.

According to Reuters.com, International Air Transport Association (IATA) director general Willie Walsh said during the group’s annual summit that the industry’s profit forecast jumped to $9.8 billion from $4.7 billion, buoyed by travel demand and lower oil prices.

Walsh also revealed that revenue is expected to grow by 9.7 percent to $803 billion this year, but is likely to fall short of the $838 billion earned in 2019 before the coronavirus pandemic shut down domestic and international flight service.

While carriers continue to highlight strong numbers due to the summer vacation travel period, Walsh said profit margins of 1.2 percent are making it hard to repair “damaged balance sheets” and resulting in airlines making an estimated “$2.25 per passenger.”

“We’re probably in either a mild recession or moderate economy. We can see that,” United Airlines CEO Scott Kirby told Reuters. “I think actually, in the U.S., we’re in a business recession, and the consumer has just been strong.”

One major issue voiced by airline executives worldwide is the extended wait times to receive new planes from manufacturers, with averages reaching at least six months per aircraft. Airbus and Boeing blamed supply chain issues for the long wait times.

As a result, airline executives have asked the IATA to work directly with manufacturers to “make sure their frustrations are heard” and the wait times are eventually reduced.

“Airlines are beyond frustrated,” Walsh said. “A solution must be found.”