KBRA's 2024 Global Aviation Sector Outlook report sees a favourable outlook for the sector in 2024 with global aviation markets showing a persistent recovery despite industry and macroeconomic challenges.
KBRA believes the robust recovery in worldwide air travel demand and increased airline efficiency with high load factors drove improved profitability, boding well for 2024. With global airlines returning to profitability in 2023 with an estimated $23.3bn in net profits, airlines are set to generate $25.7bn in net profits on historically high revenues of $964bn in 2024, according to the International Air Transport Association (IATA).
However, airline earnings margins remain thin and impediments to further improvement remain, including aircraft capacity constraints given production limitations at major original equipment manufacturers (OEMs), as well as volatile fuel prices and labour shortages that have driven higher costs.
Global aircraft lessors have reported stronger performance and they maintain strong balance sheets and liquidity, benefiting from improved airline customer performance and favourable supply and demand factors driving higher lease rates, which largely offsets the impact of their higher borrowing costs.