ISTANBUL—The world’s airlines are forecast to post a $9.8 billion net profit for 2023, more than double what had been anticipated just six months earlier as economic and other conditions have improved.

Significant factors in the upgrade of IATA’s December 2022 outlook, when it forecast a collective net profit of $4.7 billion, include China lifting its COVID-related restrictions in January—six months earlier than anticipated—cargo revenues remaining above pre-pandemic levels even though volumes have shrunk, and lower oil prices.

IATA chief economist Marie Owens Thomsen set out the revised forecast June 5 at the 79th IATA annual general meeting in Istanbul. Total revenues are expected to be $803 billion—the first time they will have exceeded $800 billion since 2019—while operating profit is expected to reach $22.4 billion, much improved over the December forecast of $3.2 billion. Costs are expected to grow 8.1% over 2022 to $781 billion.

Some 4.35 billion people are expected to travel in 2023, close to the 4.54 billion who flew in 2019.

Cargo volumes are expected to be 57.8 million metric tons, which has slipped below the 61.5 million metric tons carried in 2019 with a sharp slowing of international trade volumes. But cargo is still expected to be a winner, with revenues projected to be $142.3 billion this year versus $100 billion in 2019.

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For all the big numbers, the industry’s net profit margin will be a very weak 1.2%, far below what most corporations or investors would consider adequate.

“Airlines will make a $2.25 profit per passenger, which is the price of half a cup of coffee in Geneva, where I live,” Owens Thomsen said. “Maybe we should think about asking for tips.”

She added that the continued financial fragility illustrated how the airline industry is resilient but not robust. 

“Our industry is whack-a-mole. We get hit over the head over and over and are amazingly resilient and always get up. Robustness is about not falling down, so it’s about things like stronger balance sheets and less debt,” she said.

There are also differences in profitability region to region, with airlines in North American ahead by a long way. Their collective profit in 2023 is expected to be $11.5 billion versus $9.1 billion last year. European carriers’ profit is expected to be $5.1 billion compared with $4.1 billion, and Middle East carriers should see a $2 billion profit versus $1.4 billion.

Other regions will remain in the red, although all should see improvements. Asia-Pacific carriers are forecast to post a $6.9 billion loss versus a $13.5 billion loss in 2022; Latin American airlines will see a $1.4 billion loss versus a $3.1 billion loss; and African airlines will post a $0.5 billion loss versus a $0.8 billion loss.

Global average passenger load factors of 80.9% for 2023 will be close to the 2019 record performance of 82.6%, IATA believes, while jet fuel costs are expected to average $98.5/barrel in 2023 for a total fuel bill of $215 billion. That is cheaper than the $111.9/barrel expected last December and the average cost of $135.6 experienced in 2022.