The International Air Transport Association (IATA) has raised its airline industry profit forecast for 2024, predicting a record revenue of $996 billion.
Noor Photo | Getty Images
DUBAI, United Arab Emirates — The International Air Transport Association has raised its 2024 airline industry profit forecast, predicting revenue of $996 billion. This is the highest figure ever recorded, up 9.7% from the previous year.
IATA’s revenue outlook for this year was released on Monday At its annual general meeting in Dubai, the company announced a net profit forecast of $30.5 billion, up from its previous forecast of $25.7 billion announced in December 2023.
“With the number of air travelers expected to reach a record high of five billion in 2024, humanity’s desire to fly has never been greater. Additionally, the global economy expects air cargo to carry $8.3 trillion in trade that will be transported by air to customers,” IATA Director General Willie Walsh said in the organization’s press release.
But while revenues and profits are enjoying a tailwind, expenses are also soaring and profit margins are thin, the IATA report said.
According to industry forecasts, total airline expenses worldwide are expected to reach $936 billion, a record high, representing an annual increase of 9.4%, and the return on invested capital in 2024 is expected to be The figure is 5.7%, which is “about 3.4 percentage points below the average cost of capital.”
“The industry is on a path to sustainable profitability but there are still large gaps to close. Return on invested capital of 5.7 percent is well below the cost of capital of more than 9 percent,” Walsh said.
“At just $6.14 per passenger, our profits show how slim our margins are – less than the cost of a cup of coffee in many parts of the world.”
IATA’s directors called for “relief” from a “big array of burdensome regulations and ever-growing tax proposals” as well as tackling supply chain issues that have plagued the aviation industry for years.
He argued that more business-friendly policies would also improve airlines’ ability to “accelerate investments in sustainability.” Airlines are responsible for around 3% of global carbon emissions, and IATA has highlighted the need for the industry to become net-zero carbon by 2050, but environmental experts and scientists are skeptical.
