IATA Raises 2024 Airline Profit Forecasts

The International Air Transport Association (IATA) has revised its airline profitability forecasts for 2024, expecting stronger results compared to previous projections. Despite this, the global airline industry still grapples with achieving an aggregate return surpassing the cost of capital.

Key points from the outlook include net profits for 2024 estimated at $30.5 billion, with a net profit margin of 3.1%, reflecting an improvement over previous estimates. Return on invested capital for 2024 is expected to be 5.7%, falling short of the average cost of capital by about 3.4 percentage points.

Operating profits are projected to rise to $59.9 billion in 2024, with total revenues forecast to reach a record high of $996 billion, marking a 9.7% increase. Total expenses are also expected to reach a record high of $936 billion in 2024, a 9.4% increase. The total number of travelers is expected to reach an all-time high of 4.96 billion in 2024, with total air cargo volumes anticipated to reach 62 million tonnes.

Willie Walsh, IATA’s Director General, emphasized the importance of airline profitability and financial resilience amidst uncertainties. While the industry shows signs of improvement, challenges persist, including regulatory issues and supply chain disruptions. Outlook for Drivers: profitability is projected to strengthen, with revenues growing slightly faster than expenses. Passenger revenues are expected to reach $744 billion in 2024, showing a 15.2% increase from 2023, while cargo revenues are projected to decrease to $120 billion in 2024.

The article provides regional insights into profitability, highlighting significant gains in the Asia-Pacific region and improvements in regions like North America and Latin America. In conclusion, while the aviation industry faces challenges, it remains crucial for the economy and society. Travelers express confidence in the industry's commitment to sustainability, despite ongoing concerns.