The International Air Transport Association (IATA) has projected the global aviation industry revenue to hit a record high of $964 billion in 2024.
This estimate represents a substantial 7.6 percent increase from the expected revenue generated in 2023.
On Wednesday, the IATA disclosed these predictions on its official website, alongside other key findings.
The report indicates that net profits for the industry are expected to reach $25.7 billion in 2024, up from an estimated $23.3 billion in 2023.
Air passenger traffic is also expected to hit a historic high with 4.7 billion travelers projected for the upcoming year, surpassing the pre-pandemic level of 4.5 billion.
According to Cable news network, The report suggests that 2024 will mark the end of the extraordinary year-on-year growth and recovery witnessed in 2021-2023, as the aviation sector returns to a more normal growth pattern.
However, the persisting supply chain challenges and high demand for travel are expected to continue supporting yield growth, with passenger yields projected to improve by 1.8% compared to 2023.
This surge in passenger numbers is expected to drive revenues, which are projected to rise faster (7.6%) than expenses (6.9%), consequently strengthening profitability.
The report further states that operating profits are anticipated to increase by 21.1%, reaching $49.3 billion in 2024, compared to $40.7 billion in 2023.
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However, the growth in net profit margins is expected to be less than half the pace due to the anticipation of increased interest rates in 2024.
Highlighting the magnitude of the increase, the IATA states, “Industry revenues are expected to reach an historic high of $964 billion in 2024.”
Moreover, flight inventory is predicted to rise to 40.1 million available flights, surpassing the 2019 level of 38.9 million and exceeding the expected 36.8 million flights in 2023.
Passenger revenues are anticipated to reach $717 billion in 2024, reflecting a 12 percent increase from $642 billion in 2023. Additionally, revenue passenger kilometers (RPKs) are projected to grow by 9.8 percent year on year, according to the association.
Willie Walsh, director-general of IATA, accentuated that the passion for travel among global passengers played a significant role in fueling the industry’s recovery after the pandemic.
“People love to travel and that has helped airlines to come roaring back to pre-pandemic levels of connectivity,” he said.
He acknowledged the extraordinary speed of the recovery while noting that the pandemic had cost aviation approximately four years of growth.
“The speed of the recovery has been extraordinary; yet it also appears that the pandemic has cost aviation about four years of growth,” Walsh said.
“From 2024 the outlook indicates that we can expect more normal growth patterns for both passenger and cargo.”
Walsh emphasized the need to put the industry’s profits into perspective, highlighting that a net profit margin of 2.7 percent falls far below investor expectations in other sectors.
He stressed the significance of building a resilient future for an industry that supports 3.5% of GDP and provides livelihoods for 3.05 million people. Walsh also identified challenges faced by airlines, including onerous regulations, fragmentation, high infrastructure costs, and oligopolistic aspects within the supply chain.
As the airline industry continues to rebound, it is clear that passenger passion for travel remains a driving force.
However, stakeholders must address the underlying challenges hindering the industry’s growth to ensure a sustainable and prosperous future for aviation.
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