London (CNN) — The global airline industry will likely rake in more than $1 trillion in revenue next year, as passenger numbers look set to hit an all-time high of 5 billion, the International Air Transport Association said Tuesday.
IATA also predicted that airlines’ average profit per passenger would increase to around $7 next year, up sharply from just $2.25 18 months ago. This year, per-passenger profit is expected to be $6.40.
The figures represent a stunning comeback for an industry that, because of the pandemic, recorded three consecutive years of losses between 2020 and 2022, amounting to almost $187 billion.
Sustained demand for travel, which rebounded strongly after Covid-era travel restrictions were lifted, has quickly restored the airline industry’s profits and allowed some carriers to charge higher ticket prices.
Middle East airlines are seen leading the pack next year, with profit per passenger of $24, followed by US airlines at $12 and European airlines at $9. IATA expects airlines in Africa, Latin America and the Asia-Pacific region to be less profitable than the industry average.
In prerecorded comments, IATA director general Willie Walsh described the “huge” revenue figure as “great news.” He added, however, that net profitability across the industry would still be “wafer-thin,” at $36.6 billion — and not helped by delays in aircraft deliveries by “key players,” referring to plane makers Airbus and Boeing (BA)
“Supply chain issues are having a very significant impact on our cost base… There’s no end in sight to the problem,” he said.
A chronic shortage of planes means that older, less fuel-efficient aircraft are being flown for much longer, increasing operating and maintenance costs and negatively affecting the environment.
Global conflicts are also driving costs higher because of the big stretches of airspace closed to commercial flights, Walsh said. The closures force airlines to take longer routes and can also precipitate delays, because there is less airspace available for a growing number of flights.
According to IATA, the looming change of government in the United States could thwart the airline industry’s efforts to reach net-zero carbon emissions by 2050.
“There is a risk that the benefits that the industry witnessed under the Biden administration may not continue under the Trump administration,” Walsh said, citing as one example current tax breaks for the production of sustainable aviation fuel under the Inflation Reduction Act.
Scientists say that worldwide greenhouse gas emissions must go down to zero by 2050 on a net basis — taking account of all the pollution produced and removed from the atmosphere — in order to keep global warming to no more than 1.5 degrees Celsius. Aviation accounts for 2.5% of worldwide carbon emissions, according to Our World in Data.
Also on Tuesday, Alaska Air Group, which owns Alaska Airlines and Hawaiian Airlines, said it would start its first-ever flights from its base in Seattle to Tokyo and Seoul next year. The group, which acquired Hawaiian’s parent company in September, is targeting $1 billion in additional profit from the combined entity in 2027.
