IATA upgrades 2024 profit projections

BTN News
Tuesday, 04 June 2024

The International Air Transport Association (IATA) has announced strengthened profitability projections for airlines in 2024 compared with its June and December 2023 forecasts. 


An aggregate return above the cost of capital, however, continues to elude the global airline industry, it says.
Outlook highlights include:

•    Net profits are expected to reach US$30.5 billion in 2024 (3.1 per cent net profit margin). That will be an improvement on 2023 net profits which are estimated to be US$27.4 billion (3.0 per cent net profit margin). It is also an improvement on the US$25.7 billion (2.7 per cent net profit margin) forecast for 2024 profits that IATA released in December 2023.

•    Return on invested capital in 2024 is expected to be 5.7 per cent, which is about 3.4 percentage points (ppt) below the average cost of capital.

•    Operating profits are expected to reach US$59.9 billion in 2024, up from an estimated US$52.2 billion in 2023. 

•    Total revenues are expected to reach US$996 billion (+9.7 per cent) in 2024—a record high.  

•    Total expenses are expected to reach US$936 billion (+9.4 per cent) in 2024—a record high. 

•    Total travellers are expected to reach 4.96 billion in 2024 — a record high.

•    Total air cargo volumes are expected to reach 62 million tonnes in 2024.

“In a world of many and growing uncertainties, airlines continue to shore up their profitability. The expected aggregate net profit of US$30.5 billion in 2024 is a great achievement considering the recent deep pandemic losses. With a record five billion air travellers expected in 2024, the human need to fly has never been stronger. 

"Moreover, the global economy counts on air cargo to deliver the US$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. 

“The airline industry is on the path to sustainable profits, but there is a big gap still to cover. A 5.7 per cent return on invested capital is well below the cost of capital, which is over nine per cent. And earning just US$6.14 per passenger is an indication of just how thin our profits are - barely enough for a coffee in many parts of the world. To improve profitability, resolving supply chain issues is of critical importance so we can 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,” said Walsh.

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 US$59.9 billion (+14.7 per cent from US$52.2 billion estimated for 2023). 

Net profits, however, are expected to grow slightly more slowly at +11.3 per cent, from US$27.4 billion estimated for 2023 to US$30.5 billion estimated for 2024.

Industry revenues are expected to reach an historic high of US$996 billion in 2024. 

Passenger revenues are expected to reach US$744 billion in 2024, up 15.2 per cent from US$646 billion in 2023. Revenue passenger kilometres (RPKs) growth is expected 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.

•    Passenger yields are expected to strengthen 3.2 per cent over 2023. 

•    When measured in constant 2018 dollars, the real average return airfare in 2024 is expected to be US$252, significantly less than the US$306 of 2019.

This continues the trend of ever-increasing affordability for air travel, even if the figures are somewhat skewed by shorter journey distances in 2024 due to the slower pace of recovery in some long-haul markets.  In line with this, IATA’s April 2024 polling data revealed that 77 per cent of respondents agree that air travel is good value for money.

•    The average passenger load factor is expected to be 82.5 per cent in 2024. This is largely in line with pre-pandemic levels (82.6 per cent in 2019) and reflects tight supply and demand conditions from ongoing supply chain issues for aircraft and engines. 

IATA’s April 2024 polling data aligned with expectations for continued strong performance in passenger markets. 

IATA upgrades 2024 profit projections

BTN News
Tuesday, 04 June 2024

The International Air Transport Association (IATA) has announced strengthened profitability projections for airlines in 2024 compared with its June and December 2023 forecasts. 


An aggregate return above the cost of capital, however, continues to elude the global airline industry, it says.
Outlook highlights include:

•    Net profits are expected to reach US$30.5 billion in 2024 (3.1 per cent net profit margin). That will be an improvement on 2023 net profits which are estimated to be US$27.4 billion (3.0 per cent net profit margin). It is also an improvement on the US$25.7 billion (2.7 per cent net profit margin) forecast for 2024 profits that IATA released in December 2023.

•    Return on invested capital in 2024 is expected to be 5.7 per cent, which is about 3.4 percentage points (ppt) below the average cost of capital.

•    Operating profits are expected to reach US$59.9 billion in 2024, up from an estimated US$52.2 billion in 2023. 

•    Total revenues are expected to reach US$996 billion (+9.7 per cent) in 2024—a record high.  

•    Total expenses are expected to reach US$936 billion (+9.4 per cent) in 2024—a record high. 

•    Total travellers are expected to reach 4.96 billion in 2024 — a record high.

•    Total air cargo volumes are expected to reach 62 million tonnes in 2024.

“In a world of many and growing uncertainties, airlines continue to shore up their profitability. The expected aggregate net profit of US$30.5 billion in 2024 is a great achievement considering the recent deep pandemic losses. With a record five billion air travellers expected in 2024, the human need to fly has never been stronger. 

"Moreover, the global economy counts on air cargo to deliver the US$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. 

“The airline industry is on the path to sustainable profits, but there is a big gap still to cover. A 5.7 per cent return on invested capital is well below the cost of capital, which is over nine per cent. And earning just US$6.14 per passenger is an indication of just how thin our profits are - barely enough for a coffee in many parts of the world. To improve profitability, resolving supply chain issues is of critical importance so we can 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,” said Walsh.

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 US$59.9 billion (+14.7 per cent from US$52.2 billion estimated for 2023). 

Net profits, however, are expected to grow slightly more slowly at +11.3 per cent, from US$27.4 billion estimated for 2023 to US$30.5 billion estimated for 2024.

Industry revenues are expected to reach an historic high of US$996 billion in 2024. 

Passenger revenues are expected to reach US$744 billion in 2024, up 15.2 per cent from US$646 billion in 2023. Revenue passenger kilometres (RPKs) growth is expected 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.

•    Passenger yields are expected to strengthen 3.2 per cent over 2023. 

•    When measured in constant 2018 dollars, the real average return airfare in 2024 is expected to be US$252, significantly less than the US$306 of 2019.

This continues the trend of ever-increasing affordability for air travel, even if the figures are somewhat skewed by shorter journey distances in 2024 due to the slower pace of recovery in some long-haul markets.  In line with this, IATA’s April 2024 polling data revealed that 77 per cent of respondents agree that air travel is good value for money.

•    The average passenger load factor is expected to be 82.5 per cent in 2024. This is largely in line with pre-pandemic levels (82.6 per cent in 2019) and reflects tight supply and demand conditions from ongoing supply chain issues for aircraft and engines. 

IATA’s April 2024 polling data aligned with expectations for continued strong performance in passenger markets.