The International Air Transport Association (IATA) raised its profit forecast for the airline industry in 2024 and predicts a record revenue of $996 billion.
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DUBAI, United Arab Emirates — The International Air Transport Association raised its profit forecast for the airline industry in 2024 and predicts revenue of $996 billion — a record high and a 9.7% jump on the previous yr.
The profitability outlook for the yr, released Monday through the IATA Annual General Meeting held in Dubai, put expected net profits at $30.5 billion, up from the prior forecast of $25.7 billion published in December 2023.
“With a record five billion air travelers expected in 2024, the human must fly has never been stronger. Furthermore, the worldwide economy counts on air cargo to deliver the $8.3 trillion of trade that gets to customers by air,” Willie Walsh, IATA’s director general, said within the organization’s press release. Â
But while revenues and profits are having fun with tailwinds, expenses are also soaring, leaving profit margins thin, the IATA report said.
Total expenses for global airlines are expected to succeed in $936 billion, based on the industry body’s projections — a 9.4% annual increase and a record high. It also projects return on invested capital in 2024 at 5.7%, which it says is “about 3.4 percentage points (ppt) below the common cost of capital.”
“The airline industry is on the trail to sustainable profits, but there may be a giant gap still to cover. A 5.7% return on invested capital is well below the associated fee of capital, which is over 9%,” Walsh said.
“And earning just $6.14 per passenger is a sign of just how thin our profits are—barely enough for a coffee in lots of parts of the world.”
The IATA director called for tackling supply chain issues which have plagues the industry for years, in addition to “relief” from what he called “the parade of onerous regulation and ever-increasing tax proposals.”
He argued that more business-friendly policy would also improve airlines’ abilities to “speed up investments in sustainability.” Airlines are chargeable for around 3% of worldwide carbon emissions, and IATA has emphasized the necessity for the industry to attain net-zero carbon emissions by 2050 — something environmental experts and scientists have looked upon with skepticism.
