Profit of Middle East carriers to soar 43% to $2bn in 2023

Etihad Airways

The net profit of Middle East carriers is expected to rise 42.8 percent to $2 billion in 2023, from $1.4 billion in 2022, on higher passenger revenue and capacity, International Air Transport Association (Iata) said in a new report.

Revenue passenger kilometres is forecast to grow by 20.8 percent this year compared to a drop of 7 percent in 2019. Similarly, the capacity of regional airlines is likely to increase by 15.9 percent in 2023 from a decline of 13 percent in 2019.  

With Covid-19 restrictions now removed in all major markets, the industry is likely to reach 87.8 percent of 2019 levels of revenue passenger kilometres for the year, as passenger traffic strengthens this year, the report said.

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The global airline industry’s net profits are expected to reach $9.8 billion in 2023, more than double its forecast of $4.7 billion in December 2022, Iata said.

“Airline financial performance in 2023 is beating expectations. The pandemic years are behind us and borders are open as normal,” Willie Walsh, director general of Iata, said

Revenue is anticipated to rise by 9.7 percent to $803 billion, nearing 2019’s pre-pandemic level of $838 billion.

“Achieving profitability at an industry level after the depths of the Covid-19 crisis opens up much potential for airlines to reward investors, fund sustainability, and invest in efficiencies to connect the world even more effectively,” said Walsh.

He called on governments to keep their focus on initiatives that will strengthen safe, sustainable, efficient, and profitable connectivity.

Iata’s 2023 priorities include sustainable aviation fuel production incentives to accelerate progress toward net zero carbon emissions, ensuring the integrity of the CO2 emissions offset scheme Corsia, eliminating inefficiencies in air traffic management and applying global standards consistently.

Dubai's Emirates airline last month recorded the most profitable 12 months in its 38-year history. The carrier reported a profit of AED10.6 billion ($2.9 billion) over the last 12 months, a turnaround from a loss of AED3.9 billion in the previous financial year.

The return to the black was a result of revenue rising 81 percent year-on-year to AED107.4 billion as the airline’s capacity increased 32 percent. Its profit margin was 9.9 percent.

Emirates carried 43.6 million passengers in the last year, a year-on-year increase of 123 percent.