The airline industry is projected to register a net profit of USD 25.7 billion in 2024 as more normal growth is expected in both passenger and cargo segments, global grouping IATA said today.
For 2023, the net profit is estimated at USD 23.3 billion, significantly higher than the USD 9.8 billion projected by the International Air Transport Association (IATA) in June this year.
IATA has more than 300 airlines as members. The airline industry's operating profit is expected to touch USD 49.3 billion in 2024 from USD 40.7 billion this year. In 2024, the total revenue is estimated to grow 7.6 per cent to USD 964 billion compared to 2023.
"Some 4.7 billion people are expected to travel in 2024, a historic high that exceeds the pre-pandemic level of 4.5 billion recorded in 2019," IATA said. Industry passenger load factor is nearing its 2019 level, which is supporting the financial recovery of the airlines, IATA Director Policy and Economics Andrew Matters said.
"The airline industry net profit is expected to reach USD 25.7 billion in 2024 (2.7 per cent net profit margin). That will be a slight improvement over 2023, which is expected to show a USD 23.3 billion net profit (2.6 per cent net profit margin)," IATA said, while releasing its review of 2023 and outlook for 2024 here.
The cargo volume is expected to be higher at 61 million tonnes next year compared to 58 million tonnes in 2023.
"From 2024, the outlook indicates that we can expect more normal growth patterns for both passenger and cargo... while the recovery is impressive, a net profit margin of 2.7 per cent is far below what investors in almost any other industry would accept," IATA Director General Willie Walsh said.
According to him, the airlines will always compete ferociously for their customers but they remain far too burdened by onerous regulation, fragmentation, high infrastructure costs and a supply chain populated with oligopolies.
About the Asia Pacific market, IATA said while some of the region's main domestic markets -- China, Australia and India -- recovered quickly from the pandemic, international travel to/from the region was subdued as China only eliminated the last of its international travel restrictions in mid-2023.
The Asia Pacific region is expected to report a net loss of USD 0.1 billion in 2023 and have a net profit of USD 1.1 billion in 2024.
IATA said the overall revenue this year is expected to rise faster than expenses (7.6 per cent versus 6.9 per cent), strengthening profitability.
"While operating profits are expected to increase 21.1 per cent (USD 40.7 billion in 2023 to USD 49.3 billion in 2024), net profit margins increased at less than half the pace (10 per cent) largely due to increased interest rates expected in 2024," it noted.
Global economic developments, war, supply chains and regulatory risk will be the main factors that could positively or negatively impact the airline industry's profitability.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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