Despite a year of economic slowdown, airlines are set to bring in $9.8 billion in profit this year globally, nearly double the $4.7 billion forecasts from December.
The new projections from the International Air Transport Association come as the airline business looks to bounce back from the pandemic.
Willie Walsh, the director of the IATA, shared in a press release that the new projections come as cargo revenue remains strong, China’s move to reopen, and jet fuel prices remain low.
“Despite economic uncertainties, people are flying to reconnect, explore, and do business,” Walsh said during a speech at IATA’s annual meeting in Istanbul. “Airports are busier, hotel occupancy is rising, local economies are reviving, and the airline industry has moved into profitability.”
Experts have predicted that nearly 4.35 billion people will travel by air this year, just under 2019’s 4.54 billion.
For the first summer of this decade, Americans appear ready to travel once more, with new research from Visitors Coverage suggesting that nearly 88% of travelers are more inclined to do so this summer than they were in 2022.
An American Express Travel survey also found that over 75% of Americans view leisure travel this summer as an important expense.
In 2020, the airline industry saw only 1.8 billion passengers due to the pandemic, resulting in a massive loss for the industry.
From 2020 to 2022, the aviation industry had a net loss of $183 billion as the travel industry faced lockdowns across the world.
But, even with improved projections, the industry isn’t out of the weeds yet, as Walsh shared the profit margins are still “wafer thin.”
“Repairing damaged balance sheets and providing investors with sustainable returns on their capital will continue to be a challenge for many airlines,” Walsh said.
Overall, Walsh says that the $9.8 billion profit comes from $803 billion in revenue the industry is expected to make, meaning airlines will earn $2.25 per passenger this year.
United Airlines CEO Scott Kirby spoke with CNN about the expected profits this year, saying that he predicts his airline would return to 2019 levels of profitability.
“We’ve dramatically improved our relative and absolute profit margins, and we’re starting to pay down debt, and that gives us the firepower to really ride through a short-term recession,” Kirby added.
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