DUBAI: 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.
‘In a world of many and growing uncertainties, airlines continue to shore-up their profitability. The expected aggregate net profit of $30.5 billion in 2024 is a great achievement considering the recent deep pandemic losses. With a record five billion air travelers expected in 2024, the human need to fly has never been stronger. Moreover, the global economy counts on air cargo to deliver the $8.3 trillion of trade that gets to customers by air. Without a doubt, aviation is vital to the ambitions and prosperity of individuals and economies. Strengthening airline profitability and growing financial resilience is important. Profitability enables investments in products to meet the needs of ou
r customers and in the sustainability solutions we will need to achieve net-zero carbon emissions by 2050,’ said Willie Walsh, IATA’s Director-General.
‘The airline industry is on the path to sustainable profits, but there is a big gap still to cover. A 5.7 percent return on invested capital is well below the cost of capital, which is over 9 percent. And earning just $6.14 per passenger is an indication of just how thin our profits are-barely enough for a coffee in many parts of the world. To improve profitability, resolving supply chain issues is of critical importance, so we can deploy fleets efficiently to meet demand. And relief from the parade of onerous regulations and ever-increasing tax proposals would also help. An emphasis on public policy measures that drive business competitiveness would be a win for the economy, for jobs, and for connectivity. It would also place us in a strong position to accelerate investments in sustainability,’ said Walsh.
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 f
orecast of $111 billion (announced in December 2023).
Source: Emirates News Agency