IATA AGM: Airline profitability outlook strengthens

SINGAPORE, 7 June 2023: The International Air Transport Association (IATA) announced an expected strengthening of airline industry profitability in an upgrade of its outlook for 2023 presented at the IATA AGM held in Istanbul earlier this week

Outlook Highlights

  • Airline industry net profits are expected to reach USD9.8 billion in 2023 (1.2% net profit margin), more than double the previous forecast of USD4.7 billion (December 2022).
  • Airline industry operating profits are expected to reach USD22.4 billion in 2023, much improved over the December forecast of a USD3.2 billion operating profit. It is also more than double the USD10.1 billion operating profit estimated for 2022.
  • Some 4.35 billion people are expected to travel in 2023, closing in on the 4.54 billion who flew in 2019.
  • Cargo volumes are expected to be 57.8 million tonnes, which has slipped below the 61.5 million tonnes carried in 2019 with a sharp slowing of international trade volumes.
  • Total revenues are expected to grow 9.7% yearly to USD803 billion. This is the first time industry revenues will top the USD800 billion mark since 2019 (USD838 billion). Expense growth is expected to be contained to an 8.1% annual increase.

“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 year’s first half,” said IATA’s director general Willie Walsh.

Even with a 1.2% net profit margin, the return to net profitability is a major achievement. First, it was achieved at a time of significant economic uncertainties. And second, it follows the deepest losses in aviation’s history (USD183.3 billion of net losses for 2020-2022 (inclusive) for an average net profit margin of -11.3%). It should be noted that the airline industry entered the Covid-19 crisis at the end of a historic profit streak that saw an average net profit margin of 4.2% for the 2015-2019 period.

“Economic uncertainties have not dampened the desire to travel, even as ticket prices absorbed elevated fuel costs. After deep Covid-19 losses, even a net profit margin of 1.2% is something to celebrate! But with airlines making $2.25 per passenger on average, repairing damaged balance sheets and providing investors with sustainable returns on their capital will continue to be challenging for many airlines,” said Walsh. 

Outlook Drivers

Revenues are rising (9.7%) faster than expenses (8.1%), strengthening profitability.

Revenue: Industry revenues are expected to reach USD803 billion in 2023 (+9.7% on 2022 and -4.1% on 2019). An inventory of 34.4 million flights is expected to be available in 2023 (+24.4% on 2022, -11.5% on 2019).

Efficiency levels are high, with an expected average passenger load factor of 80.9% for 2023. That is very near the 2019 record performance of 82.6%.

IATA’s May 2023 passenger polling data supports the optimistic outlook, with 41% of travellers indicating they expect to travel more in the next 12 months than in the previous year, and 49% expect to undertake the same level of travel. Moreover, 77% of respondents indicated they were already travelling as much or more than they did pre-pandemic.


The economic and geopolitical environment presents several risks to the outlook. With just USD22.4 billion of operating profit (2.8%) standing between USD803 billion in revenues and USD781 billion in expenses, industry profitability is fragile. It could be affected (positively or negatively) by several factors. In particular, consideration should be given to:

  • Inflation-fighting measures are maturing at different rates in different markets. Central banks are calibrating the best levels for interest rates to have a maximum cooling effect on inflation while avoiding tipping economies into recession. An early or lower end-to-rate rise could stimulate markets for a stronger year-end outlook. Equally, the risk of recession remains. The industry’s outlook could shift negatively if a recession leads to job losses.
  • War in Ukraine is not having a major impact on profitability for most airlines. A currently unanticipated peace could carry the potential for cost improvements with lower oil prices and efficiencies from removing or easing airspace restrictions. An escalation, however, would likely have negative prospects for global aviation. Already broader geopolitical tensions are weighing upon international trade, and any escalation of such tensions represents a downside to the industry outlook.