The International Air Transport Association (IATA) has raised its profit forecast for the airline industry in 2024 and predicts a revenue of $996 billion.
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DUBAI, United Arab Emirates – The International Civil Aviation Organization has raised its profit forecast for the airline industry to $996 billion in 2024. – A record high and a 9.7% increase over the previous year.
The profit outlook for the year was released on Monday during the IATA The annual general meeting held in Dubai had expected a net profit of $30.5 billion in 2023, up from $25.7 billion posted in December.
“With a record five billion air passengers expected by 2024, the human need to fly has never been stronger. And the global economy relies on air cargo to deliver $8.3 trillion in trade to customers by air,” Willie Walsh, IATA’s director general, said in an organization press release.
But while revenues and profits are experiencing tailwinds, costs are also rising, making profit margins thinner, the IATA report said.
According to the industry body’s projections, total spending for global airlines is expected to reach $936 billion — a 9.4% year-over-year increase and a record high. It also projects a return on invested capital by 2024 5.7%, which it says is “about 3.4 percentage points (ppt) lower than the average cost of capital”.
“The airline industry is on a path to sustainable profitability, but there is still a big gap to cover. The 5.7% return on invested capital is lower than the cost of capital, which is 9% higher,” said Walsh.
“Earning just $6.14 per passenger shows how thin our profits are—barely enough for a coffee in many parts of the world.”
The IATA director called for tackling the supply chain issues that have plagued the industry for years, as well as “relief” from what he called a “parade of draconian regulation and ever-increasing tax proposals”.
A more business-friendly policy would improve airlines’ abilities to “accelerate investments in sustainability,” he argued. Airlines are responsible for around 3% of global carbon emissions, and IATA has stressed the need for the industry to achieve net-zero carbon emissions by 2050 – a move that environmentalists and scientists have viewed with skepticism.
