Referenews

“This is a huge turnaround considering the massive losses we were facing just 12 months ago,” Qantas Chief Executive

Alan Joyce

said.

The results are being driven by a combination of pent-up demand from consumers eager to travel after being stymied by coronavirus-related restrictions, plus cost-cutting measures by some airlines during the depths of the pandemic, analysts said. Airlines in many countries also got a big boost from government funds that helped keep them solvent.

One factor in the return to profitability has been consumers’ willingness to pay high airfares. Carriers are still scrambling to hire staff and get planes back in the air, limiting the supply of seats and flights and driving up prices. Overbooked maintenance companies, sold-out aircraft-leasing firms, shortages of spare parts and delays of new aircraft from both

Airbus SE

and

Boeing Co.

are also restricting airlines.

“There hasn’t been enough capacity to fill the demand,” said Cameron McDonald, head of research and a transportation analyst at investment firm E&P in Australia. “The only way that demand has been able to be controlled is through pricing, and you see very, very high airfares versus historic trends.”

Many of those issues, such as labor shortages, were at play in the U.S., Canada and Europe last summer, where many airlines reported profits but decided to cut back on flight schedules in an effort to focus on reliability. In places such as London, Amsterdam and Frankfurt, hub airports placed mandatory restrictions on daily passenger numbers to limit disruption and cancellations.

While their customers were often left depleted by persistent delays, last-minute cancellations and hourslong lines through airport security or baggage reclaim, those airlines have benefited.

Recoveries have played out across other carriers in the U.S. and Europe.

Delta Air Lines Inc.

reaped higher revenues last year than it did in 2019 due to the strong demand, while

American Airlines Group Inc.

said its fourth-quarter revenue was the highest in the company’s history.

“Notably, we achieved this record revenue while flying 6.1% less capacity than we did in the fourth quarter of 2019,” American Airlines CEO

Robert Isom

told investors last month.

In Europe, IAG, which also owns airlines including Aer Lingus in Ireland and Madrid-based Iberia, said Friday its revenue had surged 173% last year with operating profit jumping by €4.2 billion, equivalent to about $4.45 billion. The company said Thursday it would purchase the remaining 80% of Spanish carrier Air Europa for €400 million.

“This is our first full year back to profit since the start of the pandemic,”

Luis Gallego,

IAG’s CEO said on Friday, adding that the company was expecting another jump in earnings this year. “All of our airlines were profitable.”

First- and business-class seats are fuller than they were before the spread of Covid-19, despite the lagging recovery in corporate travel, according to

Air France-KLM Group

CEO

Ben Smith.

He attributed the rise to leisure travelers splurging on some of their first long-haul getaways since 2019.

In Asia and the Pacific, airlines have lagged behind that recovery. One reason was China keeping its borders mostly shut until recently lifting its strict Covid restrictions. Another was some airlines’ reliance on international routes, compared with places such as the U.S., where airlines were bolstered by domestic travel that wasn’t affected by international border closures.

Passenger volumes in the Asia-Pacific region last year were only 52% of pre-Covid levels, compared with 72% globally, according to Airports Council International, which represents global airports. The group expects Asia-Pacific traffic to rise, with full-year recovery to 2019 levels expected by the end of 2024.

Qantas was boosted by Australia’s strong and lucrative domestic market—the big distances between major cities make air travel a preferred choice for many. Some of its recent turnaround stems from a cost-cutting program that involved laying off thousands of workers, outsourcing ground handling and deferring the delivery of new planes. During the pandemic, Qantas also received support from the Australian government.

Some of those moves have been controversial. A union sued the airline over its ground-handling decision, and Qantas has attracted the ire of customers who have complained about flight delays, cancellation and lost baggage. Mr. Joyce pushed back against concerns over high airfares, noting the airline’s budget unit, Jetstar, still offers deals on plane tickets that are about the same price as

Uber

rides to and from airports.

Despite some carriers’ recent profits, airlines in Asia overall were forecast to post a $6.6 billion loss in 2023, the International Air Transport Association said in December. Those figures include Chinese airlines whose performance was expected to be hurt by China’s zero-Covid policies.

Although China’s borders are now open, suppressed demand for international air travel from China may still take a while to recover. Hong Kong flagship carrier

Cathay Pacific Airways Ltd.

has posted a string of losses since the start of the pandemic and doesn’t expect a full recovery to prepandemic capacity until the end of 2024.

Andy Cronin,

the CEO of Irish leasing company Avolon Holdings Ltd., one of the biggest lessors in the world, last month said he expects the easing of restrictions in China, which accounts for about 40% of all traffic in Asia, to lead to a full recovery of air travel to 2019 levels by the middle of this year.

Write to Mike Cherney at mike.cherney@wsj.com and Benjamin Katz at ben.katz@wsj.com