{"id":50381,"date":"2023-06-05T21:26:22","date_gmt":"2023-06-05T21:26:22","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/all-news\/air-travel-to-soar-near-record-in-2023-says-industry-group"},"modified":"2023-06-05T22:46:44","modified_gmt":"2023-06-05T22:46:44","slug":"air-travel-to-soar-near-record-in-2023-says-industry-group","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/air-travel-to-soar-near-record-in-2023-says-industry-group","title":{"rendered":"Air travel to soar near record in 2023, says industry group"},"content":{"rendered":"

Africa-Press – Uganda. <\/strong><\/span>Airlines will return to profit and fly a near-record 4.35 billion passengers this year, but the sector’s post-pandemic recovery remains fragile, an industry group said on Monday.<\/p>\n

The industry is forecast to post net profits totally $9.8 billion in 2023, or double previous estimates, boosted by the end of China’s Covid restrictions, according to the International Air Transport Association (IATA).<\/p>\n

The association added that its 2022 losses were half as bad as previously estimated at $3.6 billion.<\/p>\n

“Airline financial performance in 2023 is beating expectations,” IATA director general Willie Walsh said in a statement during the association’s annual general meeting in Istanbul.<\/p>\n

“Stronger profitability is supported by several positive developments. China lifted Covid-19 restrictions earlier in the year than anticipated,” Walsh said.<\/p>\n

While jet fuel prices remain high, they have moderated over the first half of the year, he added.<\/p>\n

Inflation surged worldwide as Russia’s invasion of Ukraine in February 2022 sent energy costs soaring, but oil and natural gas prices have fallen since then.<\/p>\n

“On the cost side, there is some relief,” Walsh said.<\/p>\n

“Economic uncertainties have not dampened the desire to travel, even as ticket prices absorbed elevated fuel costs,” he added.<\/p>\n

Profits equal to $2.25 per passenger <\/b><\/p>\n

Airlines transported a record 4.54 billion people in 2019 before Covid brough travel to a standstill.<\/p>\n

The industry lost $137 billion when countries-imposed lockdowns and closed borders in 2020.<\/p>\n

The sector lost another $42 billion in 2021 and was still in the red last year as China, a major market, continued to enforce Covid restrictions that were finally lifted in December.<\/p>\n

The IATA said total revenues are expected to grow to $803 billion this year, up almost 10 percent from 2022.<\/p>\n

While the industry as a whole will turn a profit, Walsh noted that it would amount to just $2.25 per passenger — a net-profit margin of 1.2 percent.<\/p>\n

The IATA, which represents around 300 airlines accounting for 83 percent of global air passenger traffic, said net profit will rise to $11.5 billion for North American air carriers, $5.1 billion for Europeans and $2 billion for those from the Middle East.<\/p>\n

But Asian, Latin American and African airlines will remain in the red.<\/p>\n

Airlines will face a total fuel bill of $215 billion this year, or $98.5 per barrel, according to the IATA. This is down from the average cost of $135.6 in 2022.<\/p>\n

Fuel will account for 28 percent of the costs that airlines face this year, compared to 24 percent in 2019.<\/p>\n

“After deep Covid-19 losses, even a net profit margin of 1.2 percent is something to celebrate,” Walsh said.<\/p>\n

“But with airlines just making $2.25 per passenger on average, repairing damaged balance sheets and providing investors with sustainable returns on their capital will continue to be a challenge for many airlines,” he added.<\/p>\n

War risks <\/b><\/p>\n

The IATA said industry profitability is “fragile” and could be affected by several factors, including interest rate hike by central bank fighting inflation.<\/p>\n

“The risk of recession remains. Should recession lead to job losses, the industry\u2019s outlook could shift negatively,” it said.<\/p>\n

While the war in Ukraine is not having a “major impact” on profitability of most airlines, an escalation would likely hurt global aviation, it said.<\/p>\n

“Already broader geopolitical tensions are weighing upon international trade and any escalation of such tensions represents a downside risk to the industry outlook,” the IATA said.<\/p>\n

Supply chain issues, which have plagued global trade since the pandemic, are still being felt.<\/p>\n

“Airlines have been directly impacted by aircraft parts supply chain ruptures which aircraft and engine manufacturers have failed to sort out,” the IATA said.<\/p>\n

“This is negatively impacting the delivery of new aircraft and the ability of airlines to maintain and deploy existing fleets.”<\/p>\n

For More News And Analysis About Uganda<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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