IATA Projects $30.5 Billion Profit And Record 4.96 Billion Travellers In 2024

The International Air Transport Association (IATA) has revised its profitability projections for airlines in 2024, showing a significant improvement compared to its June and December 2023 forecasts. Net profits are expected to reach US$30.5 billion in 2024, representing a 3.1 percent net profit margin, with total travellers anticipated to hit 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 our customers and in the sustainability solutions we will need to achieve net-zero carbon emissions by 2050," said Willie Walsh, IATA’s Director-General.

Walsh highlighted that while the airline industry is on a path to sustainable profits, there remains a significant gap to cover. A return on invested capital of 5.7 percent is still below the cost of capital, which exceeds 9 percent. Earning just $6.14 per passenger underscores how thin profit margins are—barely enough for a coffee in many parts of the world.

To improve profitability, resolving supply chain issues is crucial for efficient fleet deployment to meet demand. Additionally, relief from stringent regulations and increasing tax proposals would be beneficial. Emphasising public policy measures that enhance business competitiveness would positively impact the economy, job creation, and connectivity.

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 projected to reach $59.9 billion, marking a 14.7 percent increase from the estimated $52.2 billion for 2023.

Net profits are anticipated to grow at a slower pace of +11.3 percent, rising from an estimated $27.4 billion in 2023 to $30.5 billion in 2024.

Historic Revenue Highs

Industry revenues are forecasted to reach an historic high of $996 billion in 2024. Passenger revenues are expected to climb to $744 billion in 2024, up 15.2 percent from $646 billion in 2023.

Revenue passenger kilometres (RPKs) growth is projected at 11.6 percent year-on-year, with a long-term growth trend predicting passenger demand will increase by 3.8 percent annually over the 2023-2043 period.

Cargo Revenue Trends

Cargo revenues are expected to decline to $120 billion in 2024 from $138 billion in 2023. Although this represents a sharp drop from the peak of $210 billion in 2021, it remains above the pre-pandemic level of $101 billion recorded in 2019 and improves on the previous forecast of $111 billion announced in December 2023.

The IATA's updated projections underscore the resilience and adaptability of the airline industry amidst ongoing global uncertainties and challenges.

With inputs from WAM