What Lies Ahead for the Aviation Industry in 2023?

Jan 10, 2023 // Jan Uphues

Aviation 2023

The past year has seen aviation rebound in many ways. The cargo sector, in particular, had a good 2022, and certain regions, notably North America and Europe saw passenger demand increase steadily. It was not all good news however as we saw a continuation of troublesome staff shortages, significant impacts from the Ukraine War, rising inflation, fuel cost challenges, and several natural disasters all of which disrupted aviation. So what can we expect in 2023? The industry observers have already cast their projects for the year ahead. Let’s take a look at what they are forecasting.



Moody’s Investor Service is forecasting a positive outlook for the aviation industry in 2023. The organization is projecting operating profits for those airlines it rates to increase by more than 200% in 2023. Its projection is based on the premise that increased travel by large corporations and the rebuilding of long-haul international routes will make the recovery more resilient despite declining gross domestic product (GDP) forecasts and other economic factors could increase the risk of falling passenger demand.

According to Moody’s Senior Vice President Jonathan Root, “While ongoing recovery does not make the industry immune to recessionary pressures, we believe that because of pandemic-related dynamics, the industry’s earning would not fall as much as they did in the last recession". Also noted was that staffing shortages at airlines, airports and air traffic control have forced airlines in various regions to restore their capacity at a slower rate than they had planned. This, lower capacity than demand, enabled them to raise their ticket prices to cover their higher operating costs. Moody is predicting capacity to remain below demand in 2023.



Geopolitical and natural disruptions coupled with rising inflations and declining growth caused EUROCONTROL to revise the 2023 baseline projections of Oxford Economics. The organization also projected that staff shortages might occur in the aviation industry in 2023, impacting both airline and airport capacity. These staffing challenges were also expected to affect the global logistics supply chain which, in turn, would have a ripple effect on cargo flights.

In its Forecast Update 2022-2028, EUROCONTROL broke down its 2023 projects in three scenarios referred to as high (best case), baseline and low (worse case). In the high scenario, there would be good passenger confidence, business travel would have a fast bounce-back, and airports and airlines would mostly be able to bring back capacity in 2023 and cargo would experience limited staffing issue and global cargo output would increase. In the baseline scenario, there would be a weak GDP for most European states, inflation would impact demand, environmental concerns would peak and some airlines and airports would experience continued staffing/capacity issues in 2023, with cargo gaining only slight increases in 2023. In the low, worse case scenarios, a large number of European states would experience a deep recession in 2023, passenger demand would be negatively impacted by inflation, COVID-19 variants would surge introducing, and there would be extensive staffing and capacity issue, with the cargo sector experiencing a deterioration of staffing issues in 2023.

Looking further ahead over the period from 2022-2028, among the risks that exist and were cited in the EUROCONTROL update were: higher inflation and greater uncertainty stemming from Russia’s invasion of Ukraine, the volatility in oil and fuel prices, changes to future airspace and networks such as unexpected closure and new routes, and the threat of terrorist attacks and bans by one country of another.



The International Air Transport Association (IATA) may be more positive than other industry observers. Its forecast includes industry losses reduced to $9.7 billion in 2022 leading to profitability in 2023. IATA is basing this optimism on what has been happening in 2022. Cited were:

  • 2022 industry revenues expected to reach $782 billion; a 54% increase over 2021. Of this, passenger revenues were expected to account for $498 billion and cargo revenues $191 billion.
  • Direct employment expected to reach 2.7 million; up 4.3% over 2021.
  • An assumption that there will be solid GDP growth of 3.4% in 2022 and waning inflation over 2023.

Still, IATA does mention as significant risk factors for the aviation industry in 2023, the Ukraine War, rising interest rates and the record strength of the U.S. collar which, if it persists, will negatively affect other economies by increasing the local-currency price of all USD-denominated debt and exacerbating payments for USD-denominated fuel imports.

Overall, in considering these industry projections, the forecast for 2023 is not a clear one and the industry should expect some highs and lows over the next years.


What are your predictions for the aviation industry in 2023? Will the industry experience further upswing this year? Which steps will we have to take to ensure it does? Let us know your thoughts!

About our Expert

Jan Uphues

Jan Uphues

Marketing Manager

From the exhilarating rush of his very first flight, Jan Uphues was captivated by the world of aviation. Though that maiden voyage had its jittery moments, it set the course for a lifelong passion. While most kids dreamt of taking to the skies as pilots, Jan found his true calling at INFORM in 2018. Trading wings for words, he discovered a love for crafting compelling online content that surpasses even his ardor for flying.