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Global Airline Industry Will Be Profitable In 2023 After 3-Year Fall: IATA

The IATA forecasts a “small” net profit of USD 4.7 billion in 2023, with more than 4 billion passengers expected to fly

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The global airline industry is set to return to profitability next year after a nearly three-year downturn caused by the Covid-19 pandemic, according to an industry body, the International Air Transport Association (IATA).

The IATA forecasts a “small” net profit of USD 4.7 billion in 2023, with more than 4 billion passengers expected to fly.

According to Director General Willie Walsh, the predictions are a “step in the right direction” for an industry beleaguered by pandemic-induced travel restrictions and resulting staff shortages.

“The recovery is going well,” Walsh said CNBC. “We still have a long way to go to get back to where we were in 2019, but we're on the right track,” he added.

The predicted increase, outlined in a new report, points to the airline industry's first profitable year since 2019 when net profits were USD 26.4 billion and represents an improvement over the association's June forecast, which said that profitability was “within reach.”

IATA also reduced its forecast for industry-wide losses in 2022 to USD 6.9 billion from USD 9.7 billion in June's forecast.

In recent years, the airline industry has lost billions of dollars as coronavirus health restrictions have weighed on air travel and consumer demand.

According to IATA, the airline industry lost USD 137.7 billion in the first year of the pandemic in 2020. In 2021, those losses narrowed only slightly to USD 42 billion, as staff shortages and other disruptions hampered the industry even as air travel resumed in some places.

Wider pressures continue to weigh on the industry and the global economy, according to Walsh. However, he believes the industry is now better prepared to weather future headwinds.

“There will be difficulties in 2023, but, to be honest, these obstacles are minor in comparison to what we've overcome,” Walsh predicted.

“That's why we are optimistic about finding a way through these and returning the industry to very small levels of profitability, but profitability nonetheless,” he added.

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