What’s going on here?
Forecasts have predicted that the airline industry’s bagged itself a mighty meal ticket.
What does this mean?
The airline industry’s had more than its fair share of challenges over the last few years, and it looks like perseverance and patience are finally starting to pay off. Carriers have been grinning from wing to wing when announcing forecasts lately, cheered up by plenty of short-haul summer vacation bookings and the start of a resurgence in the more profitable long-haul routes. Mix in cheaper prices for jet fuel, and it’s no wonder the International Air Transport Association now expects the industry’s profit to hit nearly $10 billion this year, double the forecast made in December and a well-deserved lift-off from last year’s $3.6 billion loss.
Why should I care?
Zooming in: Forget about your cheap euro summer.
US and European airlines might be flying around the same number of flights this year compared to pre-pandemic 2019 – but if you’re jetting off soon, you’ll cough up a lot more. You can’t expect a seamless service in return, either: despite hopes of avoiding a rerun of last year’s summer chaos, there are still warnings that strikes could cause disruptions. And trips will likely get more and more expensive from here on out: your next flight ticket may well include the cost of climate-friendly initiatives and stricter regulation that’s been passed onto customers.
The bigger picture: Not yet cleared for takeoff.
That’s not to say the industry’s in the clear, though. While the sector’s never been known to boast especially strong profit margins, current numbers are looking pitiful for an industry that generates over $800 billion in sales each year. And there are plenty of problems on the ground too: manufacturers and repair shops are hampered with delays and backlogs right now, and if that keeps up, airlines could be facing some serious headwinds going forward.
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