Out of the Turbulence
Buying, fueling, and maintaining fleets of commercial jets isn’t cheap. So, when pandemic era travel restrictions cut off their revenue streams, airline companies buckled in for a bumpy ride.
For reference, during the peak of the pandemic in 2020, the airline industry collectively lost $137.7 billion. Even once travel resumed, it remained a struggle to keep planes in the air.
But after three years of turbulence, it looks like there are finally some sunny skies ahead. The International Air Transport Association, or IATA, expects the global airline industry to return to profitability next year.
Back to Cruising Altitude
A new industry report predicts airlines will post $4.7 billion in profits next year, which would mark the first year without a loss since 2019. This is still a far cry from the $26.4 billion net profit airlines earned in 2019. But, at this point, airline companies will surely celebrate even small wins.
The main reason for this return to profitability is a resurgence in travel demand, led primarily by the North American market. COVID-19 restrictions are relaxed in North America, especially when compared to China or Latin America.
Time to Book?
Although the airline industry looks to have booked a return flight back to normal, don’t unfasten your seatbelt just yet. Even with restrictions loosening, energy prices and labor shortages will continue to hinder airline operations for the immediate future.
But for consumers, the worst appears to be in the jetstream. At least, that’s what Willie Walsh, Director General of the IATA, believes. In Walsh’s words, there is “absolutely no excuse for the airports not to deliver on good service as we go into 2023.” After a travel year plagued by delays and cancellations, that’s a relief to hear.
If you plan on traveling in 2023, this report should refuel your confidence in booking flights. But it’s probably a good idea to get some travel insurance quotes while you’re at it – just in case.
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