6-Jun-2023 5:58 PM

IATA: North America remains standout region in terms of financial performance

IATA stated (05-Jun-2023) that while the global airline industry is expected to return to profitability in 2023, financial performance across regions remains diverse. Industry financials are improving in all regions from the "COVID-related depths" of 2020, although not all regions are expected to deliver a profit in 2023. IATA reported the following updated regional outlook:

  • North America: Remains the standout region in terms of financial performance. Consumer spending has remained solid, despite cost of living pressures, and the demand for air travel remains "robust". Air passenger demand is forecast to exceed the 2019 level in 2023;
  • Europe: Notwithstanding various capacity constraints experienced over the summer period, European carriers were able to return to profit in 2022. That profitability will strengthen further in 2023. The key regional risks relate to the war in Ukraine, labour unrest and concerns about economic performance in some key countries;
  • Asia Pacific: Now that all economies in the region have lifted COVID-19 travel restrictions, the industry recovery is underway. A sharp rise in both passenger volumes and capacity is expected to be reflected in a sizeable improvement in 2023 financial results and a narrowing of the gap to other regions;
  • Latin America: Passenger volumes are recovering quickly, but the financial performance varies considerably across the region. The region will remain in the red, although some airlines are expected to post solid profits. Overall, industry financial performance is expected to continue to improve, but a challenging economic backdrop in a number of countries is dampening the pace of recovery;
  • Middle East: The region's return to profitability in 2022 was supported by a significant increase in the passenger load factor of almost 25pp, outstripping the performance of other regions. Middle East carriers have been swiftly rebuilding their international networks and the region's international connectivity returned to 98% of its pre-COVID-19 level in Mar-2023;
  • Africa: Remains a "difficult" market in which to operate an airline, with economic, infrastructure and connectivity challenges impacting the industry performance. Despite these challenges, there is still "robust" demand for air travel in the region which underpins the continued move towards a return to overall industry profitability. [more - original PR]

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