Return to profits announced in 2023 for airlines

It’s Christmas before time for the airlines! According to the forecasts of the International Air Transport Association (IATA), published on Tuesday December 6, the return to profits for the companies is expected in 2023. Admittedly, the profit margin will not be spectacular since it will be limited to a little less of 4.5 billion euros for all carriers, or a net margin of 0.6%. But the companies come a long way. These will be their first profits since 2019 when they made just over 25 billion euros in profits.

According to IATA figures, the Covid-19 pandemic has cost airlines dearly. In 2021, the total amount of their losses amounted to 40 billion euros. Almost a lesser evil compared to the 130 billion euros lost in 2020, at the height of the health crisis. This return to better fortune is considered “a great achievement considering the extent of the financial and economic damage caused by the restrictions imposed by governments in the event of a pandemic”underlined Willie Walsh, general manager of IATA.

Better still, these first profits confirm the recovery path taken by players in the sector. A quicker return than expected. In June, IATA had forecast 8.5 billion euros in losses for the whole of 2022. Ultimately, the companies should lose this year “only” 5.7 billion euros.

Bright summer for Air France

Nevertheless, insisted on tempering the boss of IATA, the future profits expected in 2023 are only a drop of water in the immensity of the income of the companies. “A profit of €4.5 billion on industry revenues of €740 billion also illustrates that there is much further to go to put the global industry on a solid financial footing”, noted Mr. Walsh. Clearly, he specified, this rebound risks accentuating the gap between the companies which will have the means to participate in the resumption of traffic and those with pockets not deep enough to cope with it.

Already, the big American companies are the main winners of the exit from the crisis. After laying off a lot at the height of the pandemic, they also took advantage of the financial aid they were able to receive to begin the accelerated renewal of their fleets. Following the example of Delta Airlines which, during the Farnborough Air Show (United Kingdom), in July, placed an order for one hundred medium-haul Boeing 737 MAX. A contract valued at nearly 13.5 billion euros. For good measure, the company continued its shopping this summer with the purchase of twelve A220s, one of Airbus’ new medium-haul stars.

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