The International Air Transport Association (IATA) announced that net profits for airlines are expected to reach $30.5 billion in 2024, with a 3.1% net profit margin. This is an improvement from the estimated net profits of $27.4 billion in 2023. Return on invested capital is expected to be 5.7% in 2024, up from the forecasted $25.7 billion in 2024. Operating profits are projected to increase to $59.9 billion in 2024, with total revenues reaching $996 billion, and total travelers expected to reach 4.96 billion, all reaching record highs. Total air cargo volumes are expected to reach 62 million tonnes in 2024.
Willie Walsh, IATA’s Director General, highlighted the importance of airline profitability and financial resilience, emphasizing the significance of investments in products to meet customer needs and sustainability solutions for achieving net zero carbon emissions by 2050. He mentioned the challenges faced by the airline industry, such as low returns on invested capital and thin profit margins. To improve profitability, resolving supply chain issues and reducing regulatory burdens are critical.
Passenger revenues are expected to reach $744 billion in 2024, with revenue passenger kilometers (RPKs) growing by 11.6% year on year. Industry expenses are projected to increase to $936 billion in 2024, with fuel costs accounting for 31% of operating costs. Sustainable aviation fuel (SAF) production is expected to rise to meet global demand in 2024, with additional costs associated with CORSIA-related expenses.
Non-fuel unit costs are expected to remain stable at 39 cents per available tonne kilometer (ATK), while unit labor costs are projected to improve by 2.4% compared to 2023. Total employment in airlines is expected to reach 3.07 million in 2024, slightly higher than the 2.93 million employed in 2019. The global fleet inventory is expected to have 38.7 million flights in 2024, with supply chain issues impacting aircraft deliveries.
Regionally, North America is expected to continue being a significant contributor to industry profits in 2024, driven by strong passenger demand and load factors. Europe has a positive outlook, but faces challenges with supply chain issues and labor disputes. Asia-Pacific is expected to drive global RPK growth, particularly in recovering domestic markets like China, Japan, and Australia. Latin America has seen improved financial performance, with countries like Mexico, El Salvador, Guatemala, and Honduras contributing to profit growth. The Middle East benefits from strong economies and global hubs, while Africa faces operational challenges but sustained demand for air travel.
Overall, the airline industry is on a path towards sustainable profits, but must address various challenges to improve profitability and sustainability. By focusing on resolving supply chain issues, reducing regulatory burdens, and investing in sustainability solutions, airlines can strengthen their financial resilience and meet the growing demand for air travel.
