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<\/p>\nThe airline industry is projected to register a net profit of $25.7 billion in 2024 as more normal growth is expected in both passenger and cargo segments, global grouping IATA said on Wednesday.<\/p>\n
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For 2023, the net profit is estimated at $23.3 billion, significantly higher than the $9.8 billion projected by the International Air Transport Association (IATA) in June this year.<\/p>\n
IATA has more than 300 airlines as members.<\/p>\n
The airline industry’s operating profit is expected to touch $49.3 billion in 2024 from $40.7 billion this year.<\/p>\n
In 2024, the total revenue is estimated to grow 7.6 per cent to $964 billion compared to 2023.<\/p>\n
“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.<\/p>\n
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.<\/p>\n
“The airline industry net profit is expected to reach $25.7 billion in 2024 (2.7 per cent net profit margin).<\/p>\n
“That will be a slight improvement over 2023, which is expected to show a $23.3 billion net profit (2.6 per cent net profit margin),” IATA said, while releasing its review of 2023 and outlook for 2024 in Geneva.<\/p>\n
The cargo volume is expected to be higher at 61 million tonnes next year compared to 58 million tonnes in 2023.<\/p>\n
“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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
The Asia Pacific region is expected to report a net loss of $0.1 billion in 2023 and have a net profit of $1.1 billion in 2024.<\/p>\n
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.<\/p>\n
“While operating profits are expected to increase 21.1 per cent ($40.7 billion in 2023 to $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.<\/p>\n
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.<\/p>\n