The International Air Transport Association (IATA) announced strengthened profitability projections for airlines in 2024 compared with its June and December 2023 forecasts, with net profits expected to reach US$30.5 billion in 2024 (3.1 percent net profit margin), and total travellers expected to reach 4.96 billion.
Willie Walsh, IATA’s Director-General, says that the airline industry is showing signs of recovery after significant losses during the pandemic. Despite uncertainties, airlines are expected to achieve a net profit of $30.5 billion in 2024, thanks to a projected record of five billion air travelers. Air travel remains crucial for global trade, with $8.3 trillion of goods being delivered by air. However, profitability remains a challenge, with a return on invested capital below the cost of capital and thin profit margins per passenger. To improve profitability, addressing supply chain issues and reducing regulatory burdens are essential. Strengthening profitability is not only vital for meeting customer needs but also for investing in sustainability solutions to achieve net-zero carbon emissions by 2050.
Meanwhile, profitability is expected to strengthen in 2024 as revenues grow slightly faster than expenses (+9.7 percent vs. +9.4 percent respectively). Operating profits are expected to reach $59.9 billion (+14.7 percent from $52.2 billion estimated for 2023). Net profits, however, are expected to grow slightly more slowly at +11.3 percent, from $27.4 billion estimated for 2023 to $30.5 billion estimated for 2024.
Industry revenues are expected to reach an historic high of $996 billion in 2024.
Passenger revenues are expected to reach $744 billion in 2024, up 15.2 percent from $646 billion in 2023. Revenue passenger kilometres (RPKs) growth is expected to be 11.6 percent year-on-year. The long-term 20-year growth trend is expected to see passenger demand grow 3.8 percent annually for the 2023-2043 period.
Cargo revenues are expected to fall to $120 billion in 2024 (from $138 billion in 2023). Both are down sharply from the extraordinary peak of $210 billion in 2021, but it is above 2019 revenues, which were $101 billion and an improvement on the previous forecast of $111 billion (announced in December 2023).
News Source: Emirates News Agency
