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Airline profitability outlook strengthens

With a strong presence in the airfreight market, the U-Freight Group notes that IATA has announced an expected strengthening of airline industry profitability in an upgrade of its outlook for 2023.

IATA said that airline industry net profits are expected to reach USD9.8 billion in 2023 (1.2% net profit margin) which is more than double the previous forecast of USD4.7 billion (December 2022).

It added that 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.
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% year over year to USD803 billion. This is the first time that industry revenues will top the USD800 billion mark since 2019 (USD838 billion).

Cargo revenues are expected to be USD142.3 billion. While that is down sharply from USD210 billion in 2021 and USD207 billion in 2022, it is well above the USD100 billion earned in 2019. Yields will be negatively impacted by two factors: The ramping-up of passenger capacity which automatically increases available belly capacity for cargo; and the potential negative effects on international trade of economic cooling measures introduced to fight inflation. Yields are expected to correct with a 28.6% decline this year, but still remain high by all historical comparisons. Note that yield increases of 54.7% were recorded in 2020, 25.9% in 2021 and 7.4% in 2022.

You can find more information about the U-Freight Group’s international airfreight logistics services, as well as our China network, by visiting the relevant pages on this website, or speaking to your usual contact in our company.