This year, operating profitability for airlines is anticipated to recover.
The International Civil Aviation Organization (ICAO) predicted on Wednesday that the strong momentum from the previous year would cause air passenger demand to rise above pre-pandemic levels in 2023.
By the first quarter of 2023, most routes will see a swift return to pre-pandemic levels of air passenger demand. By the end of the year, demand will have increased by almost 3% compared to 2019 projections. These are fantastic developments for the aviation sector, which has spent the last three years battling the COVID-19 pandemic and a challenging economic situation.
“The air passenger predictions ICAO is providing today build on the solid momentum toward recovery in 2022, as previously assessed by ICAO statistical analysis,” said Juan Carlos Salazar, the organization’s secretary general.
Last year, the capacity recovery was led globally by the Latin American region, under the leadership of countries like Mexico, Colombia, and the Dominican Republic. It was the only region, according to ICAO statistics, with a higher seat capacity and passenger volume in 2022 compared to pre-pandemic levels. The Asia-Pacific area, however, was overlooked.
The number of air passengers in 2022 globally increased by an estimated 47% compared to 2021, said ICAO. Overall, total world passengers closed 28% below pre-pandemic numbers.
Airlines want to return to their pre-COVID profitability levels even when demand and passenger recovery are doing well. The last few years have seen numerous airlines’ bottom lines decline. Many carriers have stopped operating as a result of this, including Flybe (twice), Interjet, Flyr, Norwegian UK, Comair, ExpressJet Airlines, and others.
The ICAO noted a projected 50% growth in airline passenger revenues from 2021 to 2022, while maintaining yield and exchange rates at 2019 levels. Looking further into the future, airlines are anticipated to achieve operating profitability in the fourth quarter of 2023, following three years of losses.
The International Air Transport Association (IATA) said that the industry left 2022 in far stronger shape than it entered. Throughout last year, most governments lifted COVID-19 travel restrictions, and people took advantage of the restoration of their freedom to travel, said Willie Walsh, IATA’s General Director. The airline association said this momentum is expected to continue in 2023, despite possible challenges.
The airline industry may now refocus on the problems ahead, such as decreasing accident mortality and the environmental effect, in the expectation that the COVID-19 crisis is now behind us. Added Willie Walsh:
“Let’s hope that 2022 will go down in history as the year that governments finally put the regulatory chains that have shackled their citizenry to the planet for so long. The lesson that travel restrictions and border closures do nothing to stop the spread of contagious diseases in today’s linked globe must be understood by governments.
“Through ICAO, governments have reached agreements on goals toward zero accident mortalities by 2030 and zero carbon emissions by 2050, and these will continue to play key roles in both guiding continued progress and prioritising ICAO’s implementation support initiatives,” Juan Carlos Salazar said in his conclusion.
