Airline profitability for 2023 exceeded June projections from the International Air Transport Association, the organisation announced this week.
IATA now projects global airline revenue for 2023 to reach $896 billion, $93 billion higher than forecast six months ago.
Expenses also are anticipated to increase to $855 billion, $74 billion higher than the previous outlook. Still, IATA projects the industry's net profit to reach $23.3 billion in 2023, significantly higher than the June forecast of $9.8 billion.
The improvement was driven by passenger business, revenue from which IATA projects to increase to $642 billion, $96 billion higher than the prior outlook, according to IATA.
The association projects European carriers to have a net profit of $7.7 billion in 2023 and $7.9 billion in 2024. Demand in 2024 is forecast to be 10.5 per cent higher year over year and 7 per cent higher compared with 2019 levels.
IATA projects 2024 capacity to increase 8.8 per cent versus a year prior and 7 per cent compared with 2019.
The key risks to Europe's performance "relate to the tight labour market, and the war in Ukraine and in the Middle East," according to IATA.
2024 global outlook
IATA projects 2024 airline revenue to grow 7.6 per cent year over year to a record $964 billion, generating an anticipated profit of $25.7 billion. Expenses are forecast to increase 6.9 per cent to $914 billion.
Passenger revenue is projected to increase 12 per cent year over year to $717 billion, with 40.1 million flights projected to be on offer, exceeding the 2019 level of 38.9 million and up from the 36.8 million flights expected in 2023.
Total traffic in 2024, as measured in revenue passenger kilometres, is projected to be up 9.8 per cent year over year, however IATA said 2024 will mark the end of the "dramatic year-on-year increases" the industry has seen during the recovery between 2021 and 2023.
About 4.7 billion people are expected to travel in 2024, "an historic high that exceeds the pre-pandemic level of 4.5 billion recorded in 2019," according to IATA.
"Considering the major losses of recent years, the $25.7 billion net profit expected in 2024 is a tribute to aviation's resilience," IATA director general Willie Walsh said in a statement.
"The speed of the recovery has been extraordinary; yet it also appears that the pandemic has cost aviation about four years of growth. From 2024, the outlook indicates that we can expect more normal growth patterns for both passenger and cargo."
IATA also warned that the industry profitability was "fragile" and could be affected by many factors, including global economic developments, war, continued supply-chain challenges and regulatory risk.