Global aviation industry revenues to reach record-high of $964bn in 2024, IATA forecasts

The International Air Transport Association (IATA) has projected that the global airline industry will generate record-high revenues of $964 billion in 2024.

The projection is an increase of 7.6 percent from the estimated revenue generation in 2023.

The association disclosed this on its official website on Wednesday.

According to the report, the industry’s net profits are expected to be $25.7 billion in 2024, up from an estimated $23.3 billion in 2023.

Air passenger traffic is projected to hit a historic high of 4.7 billion people next year, exceeding the pre-virus level of 4.5 billion travellers.

“Overall revenues in 2024 are expected to rise faster than expenses (7.6% vs. 6.9%), strengthening profitability,” the report reads.

“While operating profits are expected to increase by 21.1% ($40.7 billion in 2023 to $49.3 billion in 2024), net profit margins increased at less than half the pace (10%) largely due to increased interest rates expected in 2024.

“Industry revenues are expected to reach an historic high of $964 billion in 2024.

“An inventory of 40.1 million flights is expected to be available in 2024, exceeding the 2019 level of 38.9 million and up from the 36.8 million flights expected in 2023.”

The IATA said passenger revenues are expected to reach $717 billion in 2024, up 12 percent from $642 billion in 2023.

The revenue passenger kilometers (RPKs) is also expected to grow 9.8 percent year on year, the association said.

“While that is more than double the pre-pandemic growth trend, 2024 is expected to mark the end of the dramatic year-on-year increases that have been characteristic of the recovery in 2021-2023,” the report reads.

“The high demand for travel coupled with limited capacity due to persistent supply chain issues continues to create supply and demand conditions supporting yield growth.

“Passenger yields in 2024 are expected to improve by 1.8% compared to 2023.”

‘PASSENGER PASSION DRIVES AIRLINE RECOVERY’

Willie Walsh, IATA’s director-general, said passengers love for travel around the world helped the aviation industry after the pandemic.

Considering the major losses of recent years, he said the $25.7 billion net profit expected in 2024 is a tribute to aviation’s resilience

“People love to travel and that has helped airlines to come roaring back to pre-pandemic levels of connectivity,” he said.

“The speed of the recovery has been extraordinary; yet it also appears that the pandemic has cost aviation about four years of growth.

“From 2024 the outlook indicates that we can expect more normal growth patterns for both passenger and cargo.”

Walsh said industry profits must be put into proper perspective.

According to director-general, while the recovery is impressive, a net profit margin of 2.7 percent is far below what investors in almost any other industry would accept.

“Of course, many airlines are doing better than that average, and many are struggling,” he said.

“But there is something to be learned from the fact that, on average airlines will retain just $5.45 for every passenger carried.

“That’s about enough to buy a basic ‘grande latte’ at a London Starbucks. But it is far too little to build a future that is resilient to shocks for a critical global industry on which 3.5% of GDP depends and from which 3.05 million people directly earn their livelihoods.”

Walsh said 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.”