Airline sector expected to earn net profit of $25.7 billion in 2024
The airline sector is expected to achieve a net profit of $25.7 billion in 2024, reflecting a return to more typical growth in both passenger and cargo segments, the International Air Transport Association (IATA) on Wednesday said.
The projected net profit for 2023 stands at $23.3 billion, a substantial increase compared to the earlier estimate of $9.8 billion made by IATA in June.
With over 300 airlines as members, IATA predicts that the operating profit for the airline industry will rise to $49.3 billion in 2024, up from $40.7 billion this year.
The total revenue for 2024 is expected to experience a 7.6% increase, reaching $964 billion compared to the previous year.
"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.
IATA Director of Policy and Economics, Andrew Matters, noted that the industry's passenger load factor is approaching its 2019 levels, a development that is contributing to the financial recovery of airlines.
"The airline industry net profit is expected to reach $ 25.7 billion in 2024 (2.7 per cent net profit margin). 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 here.
The cargo volume for the upcoming year is projected to increase, reaching 61 million tonnes, surpassing the 58 million tonnes recorded in 2023.
"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.
As per his statement, airlines are expected to engage in intense competition for customers; however, they continue to grapple with major challenges such as taxing regulation, fragmentation, high infrastructure costs, and a supply chain dominated by oligopolies.
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