Global air travel will reach over 95% of pre-pandemic levels in 2023
- In India, the domestic air traffic has already crossed pre-pandemic levels with the monthly air traffic in May 2023 breaching all previous records
The global air traffic level will reach more than 95% of the pre-pandemic levels in 2023 as nearly 4.35 billion people are expected to travel in 2023 as compared to 4.54 billion flyers in 2019, as per global airlines body International Air Transport Association.
"The pandemic years are behind us, and borders are open as normal. Despite economic uncertainties, people are flying to reconnect, explore, and do business. Latest data show passenger traffic at over 90% of 2019 levels. Airports are busier, hotel occupancy is rising, local economies are reviving, and the airline industry has moved into profitability," Director General Willie Walsh said at the organisation's annual general meeting.
In India, the domestic air traffic has already crossed pre-pandemic levels with the monthly air traffic in May 2023 breaching all previous records. Indian airlines carried around 13.2 million passengers in May, surpassing the previous record of 13.02 million set in December 2019. Domestic air traffic in May is also 15% higher than the year-ago period and has risen more than 2% since April.
Globally, airlines are expected to post net profits of $9.8 billion in 2023, albeit with a "wafer thin" net profit margin of 1.2%.The airline industry posted an average net profit margin of 4.2% for 2015-2019 period.
The airlines body has increased the profitability forecast for airlines from its earlier estimate of $4.7 billion, which was announced in December 2022.
Airline industry operating profits are expected to reach $22.4 billion in 2023, much improved over the December forecast of a $3.2 billion operating profit, IATA said.
The total revenues are expected to exceed $800 billion for the airline industry for the first time since 2019 at $803 billion, an increase of 9.7% year on year.
“Airline financial performance in 2023 is beating expectations. Stronger profitability is supported by several positive developments. China lifted COVID-19 restrictions earlier in the year than anticipated. Cargo revenues remain above pre-pandemic levels even though volumes have not. And, on the cost side, there is some relief. Jet fuel prices, although still high, have moderated over the first half of the year,” Walsh said.
Supply chain issues continue to challenge the capacity of airlines. Walsh said that the suppliers have been far too slow in dealing with supply chain blockages and this is raising costs and limiting the airlines' ability to deploy aircraft.
"Airlines have been directly impacted by aircraft parts supply chain ruptures which aircraft and engine manufacturers have failed to sort out. Airlines are beyond frustrated. A solution must be found," he said.
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First Published:5 Jun 2023, 08:02 PM IST
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