According to the IATA report, airline industry operating profits are estimated to reach $22.4 billion in 2023, a figure "well above" the December forecast of $3.2 billion in operating profits. It is also more than double the $10.1 billion operating profit estimate for 2022.

In addition, the Association expects some 4.35 billion people to travel in 2023, which is close to the 4.54 billion who flew in 2019. In addition, cargo volumes are expected to be 57.8 million tonnes, slightly below the 61.5 million tonnes carried in 2019 "with a sharp slowdown in international trade volumes".

Finally, the agency estimates total revenues to grow by 9.7% year-on-year to $803bn. According to IATA, this is the first time industry revenues will surpass the $800bn mark since 2019 ($838bn). On the other hand, they expect cost growth to be contained and the annual increase to be 8.1%, as well as an increase in flights to 34.4 million (+24.4% from 2022 and -11.5% from 2019).

Related to this, IATA expects jet fuel costs to average $98.5/bbl in 2023, for a total fuel cost of $215bn. "This is cheaper than the $111.9/barrel previously forecast (December 2022) and the average cost of $135.6 experienced in 2022," they explain in the report.

"The return to net profitability, even with a net profit margin of 1.2%, is an important achievement. Firstly, it has been achieved at a time of great economic uncertainty. And secondly, it comes after the deepest losses in aviation history ($183.3 billion of net losses by 2020-2022 (inclusive) for an average net profit margin of -11.3% over that period). It should be noted that the airline industry entered the Covid-19 crisis at the end of a historic winning streak that saw an average net profit margin of 4.2% for the period 2015-2019," Walsh notes.

The IATA director general also said that "economic uncertainties have not quelled the desire to travel, even as ticket prices absorbed high fuel costs". "But with airlines earning only $2.25 per passenger on average, repairing damaged balance sheets and providing investors with sustainable returns on their capital will remain a challenge for many airlines," it said.

By region, the agency expects financial results to remain "mixed". According to IATA, the positive news is that industry finances are improving in all regions since the 2020 lows, although not all regions are expected to make a profit this year.

North America remains the standout region in terms of financial performance. Consumer spending has remained solid, despite cost of living pressures, and demand for air travel remains robust; air passenger demand is expected to exceed its pre-pandemic level this year.

On the other hand, in Europe, despite the various capacity constraints experienced during the summer period, European airlines were able to return to profitability in 2022. This profitability is set to strengthen further in 2023, say IATA, while noting that the main regional risks are related to the war in Ukraine, labour disputes and concerns about the economic performance of some key countries.

In Asia-Pacific, they explain, recovery is underway once all economies have lifted pandemic-related restrictions. "Strong growth in both passenger volumes and capacity is expected to be reflected in a significant improvement in 2023 financial results and a narrowing of the gap with other regions," they note.

In the Middle East, the region's return to profitability in 2022 was supported by a "significant increase" in passenger load factor of almost 25 percentage points, outperforming all other regions. On the other hand, Latin American airlines have seen passenger numbers recover rapidly, while financial results varied "considerably" between countries. Finally, Africa remains a "difficult" market for airlines, "with economic, infrastructure and connectivity issues affecting industry performance". "However, despite these difficulties, there remains strong demand for air transport in the region, supporting continued progress towards a recovery in overall industry profitability," they conclude.