The International Air Transport Association (IATA) has raised its profit forecast for the airline industry in 2024, predicting revenue will hit a record $996 billion.
Noor Photo | Getty Images
DUBAI, United Arab Emirates – The International Air Transport Association has raised its 2024 profit forecast for the airline industry, predicting revenue of $996 billion. ——A record high, an increase of 9.7% over the previous year.
Profit outlook for this year, released on Monday during the International Air Transport Association (IATA) At the annual shareholder meeting in Dubai, net profit was expected to be $30.5 billion, up from a previous forecast of $25.7 billion released in December 2023.
Willie Walsh of the International Air Transport Association (IATA) said: “With the number of air passengers expected to reach a record 5 billion by 2024, the demand for flying has never been greater. In addition, The global economy relies on air cargo to deliver $8.3 trillion worth of trade to customers via air transport.
The IATA report said that while revenue and profits are tailing off, expenses are also soaring, leading to razor-thin profit margins.
According to forecasts by the industry body, total global airline spending is expected to reach $936 billion, an annual growth rate of 9.4%, a record high. It also expects return on invested capital in 2024 to be 5.7%, which is said to be “about 3.4 percentage points (ppt) lower than the average cost of capital.”
“The aviation industry is on the path to sustainable profits, but there is still a big gap to fill. A return on invested capital of 5.7% is well below the cost of capital of over 9%,” said Walsh.
“Revenue per passenger is just $6.14, which shows how thin our margins are – barely enough for a cup of coffee in many parts of the world.”
The IATA chief called for solutions to supply chain problems that have plagued the industry for years and “easing” what he called “onerous regulations and increasing tax proposals”.
He believes that more business-friendly policies will also improve airlines’ ability to “accelerate investment in sustainable development.” Airlines account for about 3% of global carbon emissions, and IATA has stressed the industry’s need to achieve net-zero carbon emissions by 2050 – something environmental experts and scientists are skeptical about.
About The Author
