Michelle ThompsonThe global airline industry is expected to generate over $1 trillion in revenue next year, with passenger numbers projected to reach a record 5 billion, according to the International Air Transport Association (IATA). The average profit per passenger is forecast to rise to around $7, up from $2.25 just 18 months ago, and $6.40 this year.
This marks a remarkable recovery for an industry that suffered nearly $187 billion in losses during the pandemic from 2020 to 2022. Strong demand for travel post-pandemic, along with higher ticket prices, has driven the industry’s profitability.
Middle Eastern airlines are anticipated to lead in profitability, with $24 profit per passenger, followed by U.S. airlines at $12 and European airlines at $9. Airlines in Africa, Latin America, and Asia-Pacific are expected to see lower profits.
Despite this recovery, IATA’s Director General Willie Walsh cautioned that net profitability across the industry would remain “wafer-thin,” projecting $36.6 billion. Supply chain issues and aircraft delivery delays, particularly from manufacturers Airbus and Boeing, continue to affect costs. Additionally, airlines are operating older, less fuel-efficient planes due to a shortage of new aircraft, which is increasing operating costs and environmental impact.
Global conflicts are also escalating costs, as airspace closures force airlines to take longer routes and deal with delays. Walsh also expressed concerns that a potential change in U.S. government leadership could jeopardize the airline industry’s progress toward net-zero emissions by 2050, especially if policies like current tax breaks for sustainable aviation fuel are rolled back.
Meanwhile, Alaska Air Group announced it would begin flights from Seattle to Tokyo and Seoul next year, aiming to generate $1 billion in additional profit by 2027 after acquiring Hawaiian Airlines’ parent company in September.
