Airlines have made up for the coronavirus slump
Published: Wednesday, Dec 6th 2023, 13:30
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Almost as many people are flying around the world again as before the coronavirus crisis. After years of losses, airlines are once again earning as much money as they did in 2019, but are moaning about rising interest rates.
The global aviation industry has largely made up for the consequences of the coronavirus pandemic. According to estimates by the industry association IATA, airlines will make a profit of 23.3 billion US dollars this year and 25.7 billion next year. With these profit forecasts raised again, the pre-crisis level of 2019 (USD 26.4 billion) would almost be reached.
According to the figures presented in Geneva on Wednesday, air traffic in 2023 has already exceeded the 2019 volume by more than 2%. The absolute number of global passengers is likely to fall just short of the 2019 figure of 4.54 billion in the current year, but will exceed it by nine percent next year, as IATA economist Andrew Matters showed. That would be a record of around 4.7 billion passengers.
The expected profits are a contribution to strengthening the resilience of aviation after the losses of previous years, explained IATA CEO Willie Walsh in a press release. The pandemic had cost the industry four years of growth despite the exceptionally rapid recovery.
Net margin not yet satisfactory
However, the net margin of 2.75 percent is still well below what investors would accept in almost any other industry. On average, an airline only earns 5.45 dollars per passenger. "That's just enough to buy a simple grand latte at Starbucks London," said Walsh.
For the coming year, the association expects turnover (7.6% to 964 billion dollars) to rise slightly faster than costs (6.9%). High interest rates, in particular, are likely to reduce the rising operating profits once again.
With a share of 31 percent, kerosene remains the largest cost block. Only just over half a percent of the required volume of 99 billion US gallons (375 billion liters) is available as sustainably produced fuel (SAF). SAF production has already doubled in 2023 compared to the previous year and will triple in 2024.
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