Airline net profits are set to reach $30.5bn in the year ahead, according to International Air Transport Association (IATA). The projection is a marked improvement over last year’s net profits of an estimated $27.4bn, as well as IATA’s own December 2023 estimations of $25.7bn for full year 2024.
The strong net profit projections are driven by total revenues – which are expected to see a record high of $996bn – surpassing expenses, which are also set to hit record levels at $936bn. IATA’s June forecast added that operating profits are expected to reach $59.9bn, up from approximately $52.2bn in 2023.
“In a world of many and growing uncertainties, airlines continue to shore-up their profitability,” said IATA director general Willie Walsh. “The expected aggregate net profit of $30.5 billion in 2024 is a great achievement considering the recent deep pandemic losses.”
Post-pandemic, travel demand is higher than ever as passengers seek to make up for the time lost stuck indoors. IATA’s data expects a record high number of passengers in 2024 at 4.96bn, contributing around $744bn in passenger revenues.
“With a record five billion air travellers expected in 2024, the human need to fly has never been stronger,” said Walsh.
IATA projects total air cargo volumes to reach 62 million tonnes in the year.
Walsh commented: “Without a doubt, aviation is vital to the ambitions and prosperity of individuals and economies. Strengthening airline profitability and growing financial resilience is important.”
Return on invested capital in 2024 will be around 5.7%, around 3.4 percentage points below the average cost of capital.
IATA noted that its profitability figures could be impacted by supply chain issues and greater sustainability requirements as several elections are held over 2024 and more regulation comes into place. Furthermore, while conflicts in Ukraine and the Middle East have largely been contained within their respective regions, the threat of these conflicts spilling over could impact airline profits.
While inflation, high interest rates, and a slowing GDP growth post-COVID, airlines have remained resilient throughout the turbulent economic growth. Though, IATA said the economic development in China should be “closely watched”. It read in its report: “Slowing growth, youth unemployment, and the relative strength of the service sector over manufacturing are all indications that China’s economy is in transition, which could have broad impacts beyond its borders.”
Airline profits projected to reach over $30bn in 2024
