2023-06-10 05:10:17
Par Chloé Berry
Published on
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Almost as many passengers this year as in 2019 and a return to profit. After being torpedoed by the pandemic, the airline sector world is in the process of signing a spectacular recovery, which remains however fragile according to the companies.
These expect to carry 4.35 billion passengers in the world this year, not far from the record of 4.54 billion in 2019, announced Monday their main international association, Iata, meeting in general assembly in Istanbul.
This vigorous recovery of traffic, thanks in particular to the reopening of China, will result in a return to profits for carriers. They are expected to generate $9.8 billion in net profit this year – double what Iata had previously expected, which has also halved its loss estimates for 2022 to $3.6 billion.
Some inequalities
Not all geographic areas will return to profit this year, however, warned Iata. North American, European and Middle Eastern carriers are expected to be largely in the green, with cumulative $11.5, $5.1 and $2 billion respectively.
But companies in the Asia-Pacific region (-6.9 billion dollars), Latin America (-1.4 billion) and Africa (-500 million) will remain in deficit.
“Airlines’ financial performance is better than expected. The stronger profitability is supported by several positive developments,” said Willie Walsh, Iata’s chief executive.
Accounts need to be restored
Among them: “China lifted Covid-19 restrictions earlier than expected. Freight revenues remain higher than before the pandemic, although volumes do not. And the costs are starting to come down. Kerosene prices, still high, contracted in the first half,” added Walsh.
Companies should spend in 2023 some 215 billion dollars for their fuel, or 28% of their costs, at an average jet fuel price of $98.5 per barrel, according to Iata. In 2022, this price was $135.6 and forced carriers to devote nearly 30% of their expenses to it, compared to 24% in 2019.
Walsh tempered that optimism, however, by noting that on average, airlines earned just $2.25 per passenger.
In this context, “many companies will find it difficult to restore their accounts and offer sustainable returns on investment” to their shareholders, conceded the leader of Iata.
Supply problems
The organization, which brings together some 300 airlines claiming 83% of global air passenger traffic, noted that the profitability of the sector remained “fragile” and might be affected by several factors.
Topic on everyone’s lips during the Istanbul rally, the raw material shortages and parts are affecting the industry’s ability to grow, Iata also said.
Due to supply chain disruptions “that aircraft manufacturers and engine manufacturers have failed to resolve”, airlines struggle to “maintain and deploy their current fleets”criticized the organization.
In 2020, the first year of the pandemic, the number of air passengers had collapsed by 60% to 1.8 billion. It had rebounded slightly in 2021 to 2.3 billion and then recovered in 2022 74% of the pre-crisis level, or some 3.3 billion travelers, according to the International Civil Aviation Organization, an agency of the UN.
Source : © 2023 AFP
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