This chart shows how the airline industry will return to profit next year

As the world observes International Civil Aviation Day on December 7 to “generate and reinforce worldwide awareness of the importance of international civil aviation to the social and economic development of states,” the global aviation industry looks set to leave Covid-related turbulence behind and fly into calmer skies. According to the International Air Transport Association (IATA), airlines managed to cut their losses significantly in 2022 and are now predicted to return to profitability in 2023.

The IATA expects global airline losses to amount to $6.9 billion this year, a significant improvement over 2020 and 2021, when the industry realized losses of $137.7 and $42.0 billion, respectively. Going forward, the IATA expects the aviation sector to return to profitability, albeit a much lower level compared to pre-pandemic times. Profits are expected to reach $4.7 billion next year, compared to $26.4 billion in 2019. Looking at the profit margin – 0.6 percent expected for 2024 vs. 3.1 percent in 2019 – reveals that there is still a lot of ground to cover for the industry to return to previous heights.

Now that travel restrictions have been lifted in most parts of the world, high fuel costs, inflation and the weak economic outlook are weighing on the industry’s results. “The expected profits for 2023 are razor thin,” the IATA concludes. “The challenges that airlines will face in 2023, while complex, will fall into our areas of experience. The industry has built a great capability to adjust to fluctuations in the economy, major cost items like fuel prices, and passenger preference.”