Global Airlines net profits climb to $30.5bn in 2024 –
The International Air Transport Association (IATA) has forecasted that net profits for global airlines were expected to climb to an all-time $30.5 billion in 2024 at 3.1 per cent margin.
The association in a statement said that this would be an improvement on 2023 net profits, which were estimated to be $27.4 billion, about 3 per cent net profit margin.
A statement by IATA said that the figure was also an improvement on the $25.7 billion, about 2.7 per cent net profit margin forecast for 2024 profits, which the association released in December 2023. IATA further stated that return on invested capital in 2024 is expected to be 5.7 per cent, which is about 3.4 percentage points below the average cost of capital.
It added that operating profits are expected to reach $59.9 billion in 2024, up from an estimated $52.2 billion in 2023, while total revenues are expected to reach $996 billion (+9.7 per cent) in 2024—a record high. It expressed further that total expenses are estimated to reach $936 billion (+9.4 per cent) in 2024—a record high, while the total estimated travellers within the year are expected to reach 4.96 billion, another record figure.
Besides, the total air cargo volumes are expected to reach 62 million tonnes in 2024, IATA said.
Industry revenues are forecasted to reach an historic high of $996 billion in 2024.
IATA also explained that passenger revenues are expected to reach $744 billion in 2024, up 15.2 per cent from $646 billion in 2023.
Revenue Passenger kilometers (RPKs) growth is estimated to be 11.6 per cent year-on-year.
The long-term 20-year growth trend is expected to see passenger demand grow 3.8 per cent annually for the 2023-2043 period.
“In a world of many and growing uncertainties, airlines continue to shore-up their profitability. The expected aggregate net profit of $30.5 billion in 2024 is a great achievement considering the recent deep pandemic losses. With a record five billion air travelers expected in 2024, the human need to fly has never been stronger.
“Moreover, the global economy counts on air cargo to deliver the $8.3 trillion of trade that gets to customers by air. Without a doubt, aviation is vital to the ambitions and prosperity of individuals and economies.
“Strengthening airline profitability and growing financial resilience is important. Profitability enables investments in products to meet the needs of our customers and in the sustainability solutions we will need to achieve net zero carbon emissions by 2050,” said Willie Walsh, IATA’s Director-General.
Walsh added that the airline industry was on the path to sustainable profits, but there was a big gap still to cover.
He explained that in 2024, all regions are expected to generate profits for a second year in a row with the most significant increase being for Asia-Pacific carriers.
According to him, a 5.7 per cent return on invested capital was well below the cost of capital, which he put at over 9 per cent.
He maintained that earning just $6.14 per passenger was an indication of just how thin the profits were—barely enough for a coffee in many parts of the world.
To improve profitability, resolving supply chain issues, Walsh said, was of critical importance so that operators could deploy fleets efficiently to meet demand.
“And relief from the parade of onerous regulation and ever-increasing tax proposals would also help. An emphasis on public policy measures that drive business competitiveness would be a win for the economy, for jobs, and for connectivity. It would also place us in a strong position to accelerate investments in sustainability,” Walsh added.
Profitability is expected to strengthen in 2024 as revenues grow slightly faster than expenses, +9.7 per cent vs. +9.4 per cent, respectively.
Operating profits are expected to reach $59.9 billion, +14.7 per cent from $52.2 billion estimated for 2023).
Net profits, however, are expected to grow slightly more slowly at +11.3 per cent, from $27.4 billion estimated for 2023 to $30.5 billion estimated for 2024.
An inventory of 38.7 million flights is expected to be available in 2024. This is 1.4 million flights below previous estimates (December 2023) largely attributable to the slowing pace of deliveries in the face of persistent supply chain issues in the aerospace sector.
For example, the number of aircraft deliveries scheduled for 2024 is expected to be 1,583, which is 11 per cent less than the expectations published just months ago that anticipated 1,777 aircraft would join the global fleet in 2024.
