Airlines more than double profit forecasts to £8bn in holiday bookings spree

Airlines have more than doubled their profit forecasts to £8bn as the travel industry cashes in on holiday bookings

Airlines have more than doubled their profit forecasts for 2023, while the travel industry is benefiting from post-pandemic demand.

The International Air Transport Association (IATA) said it expects profits this year to total £8bn – up from a previous target of £3.8bn – after a number of airlines released lavish updates in recent weeks. published.

While a cost-of-living crisis has put a strain on many households, the summer holiday will be a blockbuster for airlines such as British Airways, Virgin Atlantic, Easyjet and Ryanair.

Profits are expected to rise after airlines raked in £2.9bn last year as they embarked on the road to recovery from the devastating blow of the pandemic to business.

“The years of the pandemic are behind us and borders are open as normal,” said IATA director-general Willie Walsh, the former boss of Aer Lingus and British Airways.

Launch: The International Air Transport Association said it expects profits to total £8bn this year – up from a previous target of £3.8bn

Speaking at the group’s annual meeting in Istanbul, the industry veteran added: “Resilience is the story of the day and there are many good reasons for optimism.

“Reaching industry-level profitability after the depths of the Covid-19 crisis opens up many opportunities for airlines to reward investors, fund sustainability and invest in efficiency to connect the world even more effectively.

“Economic uncertainties have not dampened the desire to travel, even as ticket prices have absorbed higher fuel costs.”

Travel restrictions left airlines languishing in 2020 and 2021, when the industry posted losses of £111bn and £34bn respectively. Industry profits peaked at £30bn in 2017, while revenues hit a record high of £675bn in 2019, the year before the pandemic hit.

IATA predicted total revenues would grow 9.7 per cent this year to £646 billion by 2023.

Passenger numbers are expected to recover almost to pre-pandemic levels, with 4.35 billion people expected to travel in 2023, approaching 4.54 billion in 2019.

Ryanair slipped back into the black last year with a profit of £1.2bn and forecasts an even better performance in 2023.

To give the industry another boost, the first British Airways flight between London Heathrow and Beijing took off yesterday since the Covid outbreak.

The route was suspended three years ago at the start of the pandemic. Virgin Atlantic also announced new flights from London to Sao Paulo in Brazil and Bangalore in India would start next year.

The industry has faced challenges, including higher fuel costs and disruptions in the aircraft parts supply chain.

But despite the optimism, shares of Easyjet fell 0.2 percent yesterday, while BA owner IAG fell 0.4 percent.