Istanbul: The Middle Eastern carriers are expected to post a net profit of $2bn this year, driven by network rebuilding, IATA has said in a report.
According to IATA Director General Willie Walsh, the Middle East carriers have been swiftly rebuilding their international networks and in March 2023, while the region’s international connectivity has returned to 98% of its pre-Covid level.
The region’s return to profitability in 2022 (estimated at $1.4bn) was supported by a significant increase in the passenger load factor of almost 25 percentage points, outstripping the performance of the other regions.
Airline industry is en route to a profitable, safe, efficient, and sustainable future, Walsh said on Monday and noted that with $803bn of revenues, airline net profits are expected to reach $9.8bn in net profit this year.
The estimated net profit this year is more than double the previous forecast of $4.7bn in December 2022.
Some 4.35bn people are expected to travel in 2023, which is closing in on the 4.54bn who flew in 2019.
Cargo volumes are expected to be 57.8mn tonnes, which has slipped below the 61.5mn tonnes carried in 2019 with a sharp slowing of international trade volumes.
“Resilience is the story of the day and there are many good reasons for optimism. Achieving profitability at an industry level after the depths of the Covid-19 crisis opens up much potential for airlines to reward investors, fund sustainability, and invest in efficiencies to connect the world even more effectively. That’s a big ‘to do’ list to achieve with just a 1.2% net profit margin. That’s why we call on governments to keep their focus on initiatives that will strengthen safe, sustainable, efficient, and profitable connectivity,” Walsh noted.
He said priorities for 2023 include sustainable aviation fuel (SAF) production incentives to accelerate progress toward net zero carbon emissions, ensuring the integrity of CORSIA as the economic measure applied to international aviation, eliminating inefficiencies in air traffic management and applying global standards consistently.
“Passengers are counting on a safe, sustainable, efficient and profitable airline industry. A recent IATA poll of travellers in 11 global markets revealed that 81% of those surveyed emerged from the pandemic with a greater appreciation of the freedom that flying makes possible,” Walsh added.
Willie Walsh, IATA director general. PICTURE: www.iata.org