A new forecast from the International Air Transport Association (IATA) has shown that global airlines are set to rake in US$9.8 billion (AU$14.8b) in profit as the industry bounces back from the pandemic.
This prediction is more than double IATA’s profit forecast of US$4.7b (AU$7.1b) it made in December.
This profitability was supported by the reopening of China, lower jet fuel prices and support from cargo revenues, according to IATA’s director general Willie Walsh.
IATA expects 4.35 billion people to travel by air this year, which comes close to the 4.54 billion passengers who flew in 2019. This is a strong turnaround from the 1.8 billion passengers who flew in 2020.
“Despite economic uncertainties, people are flying to reconnect, explore, and do business,” Walsh said during a speech at IATA’s AGM.
“Airports are busier, hotel occupancy is rising, local economies are reviving, and the airline industry has moved into profitability.”
However, profit margins for airlines remain slim, Walsh added.
“Repairing damaged balance sheets and providing investors with sustainable returns on their capital will continue to be a challenge for many airlines,” he added.
Airlines will make US$9.8b (AU$14.8b) in profit off $803b (AU$1.21t), which means the airlines will net only AU$3.40 per passenger, according to CNN.
However, Walsh sees this as a cause for celebration considering the heavy losses the aviation industry incurred during the pandemic.
“The fact that the industry could survive that demonstrates the resilience and determination and the actions that have been taken” Walsh told CNN, adding “we’re fully acknowledging challenges but we’re still quietly confident about the future.”
