Aviation industry on pace for monumental earnings in 2023 and beyond
The aviation sector is poised for staggering profits in the current year, surpassing initial projections by a considerable margin. According to the International Air Transport Association (IATA), airlines are estimated to rake in a cumulative operating profit of an astounding 23.3 billion dollars, more than doubling the 9.8 billion dollars forecast earlier in June. For the year ahead, IATA predicts even more impressive figures and potentially a new all-time high of 4.7 billion passengers.
A slight adjustment to the projected passenger count for 2023, as IATA now forecasts 4.29 billion travelers instead of the 4.35 billion anticipated in June. This surge in profits can be attributed to the dramatic increase in ticket prices. The high demand for flights often outpaced the available capacity, with a shortage of aircraft and labor making it difficult to further expand services.
Looking ahead to 2024, IATA expects profits to remain in the same ballpark, estimating an operating profit of 25.7 billion dollars. The industry is also expecting a total revenue record of an incredible 964 billion dollars for the current year, with airlines projected to generate 896 billion dollars in revenue.
The last record for passenger numbers was set in the pre-pandemic year of 2019, when a remarkable 4.54 billion individuals traveled by air, resulting in revenue of 838 billion dollars. The COVID-19 crisis, lasting from 2020 to 2022, led to losses of a staggering 183 billion dollars for the aviation industry. The IATA Director General, Willie Walsh, described this period as an "extraordinary pace of recovery", despite it costing the industry four precious years of growth. From 2024 onward, Walsh predicted that the industry would return to "more normal growth rates", both in terms of passenger and freight numbers.
Additional Insights:
- Airbus Execution:
- 2024 Success: Earning a 6% increase in total revenues to 69.2 billion euros ($76.1 billion) in 2024, Airbus reported strong consolidated order book growth of 13.5%, now valued at an astonishing 629 billion euros ($692 billion)[1].
- 2025 Prospects: Airbus is bullish on its performance trend into 2025, expecting commercial aircraft deliveries and sales in its helicopter and defense divisions to continue increasing[1].
- Etihad Airways Revival:
- 2024 Profit Surge: Etihad Airways declared a record profit of 476 million dollars in 2024, representing a significant leap from the 143 million dollar profit in 2023. The airline attributed this success to a 32% uptick in passenger numbers, the rebound of cargo operations, and strategic cost-cutting measures[2].
- Revenue Expansion: Etihad's revenues jumped to nearly 6.9 billion dollars in 2024, marking a substantial growth from the 5.5 billion dollars in 2023[2].
- United Airlines Record-Setting Performance:
- 2024 Financials: United Airlines delivered impressive pre-tax earnings of 4.2 billion dollars for the full year, with adjustable pre-tax earnings of 4.6 billion dollars. The carrier achieved a record-breaking fiscal year, driven by robust growth in premium, corporate, and basic economy segments[3][4][5].
- Operationally Speaking: United Airlines experienced remarkable demand in the first quarter of 2025, with operational metrics improving considerably, achieving top status in on-time departures at its seven major U.S. hubs[4].
These changes in anticipated profits are the result of the aviation sector's rapid recovery from the COVID-19 crisis, fueled by strategic investments in aircraft, cabin interiors, and operational enhancements. The industry's resilience and foresight have played a crucial role in these record-breaking earnings.
