According to the latest IATAThe air transport industry should return to good health in 2023 and 2024. Net profits in the air transport industry are expected to reach 25.7 billion by 2024. This would generate a net profit margin of 2.7 %. This is a slight improvement on 2023, when net profit is expected to be $23.3 billion. This implies a net profit margin of 2.6 %.
Industry operating profits expected to reach $49.3 billion in 202440.7 billion in 2023. Total revenues in 2024 should increase by 7.6 % year-on-year to a record $964 billion. Spending growth is expected to be slightly lower, at 6.9 1Q3, for a total of $914 billion.
Record passenger numbers
2024 should also mark an all-time record for passenger numbers. IATA estimates that there should be some 4.7 billion people next year. This would mean that the industry would finally surpass its pre-pandemic record. This was 4.5 billion passengers in 2019.
This optimism is based on several factors. According to an IATA passenger survey carried out last November, a third of travellers questioned said they were travelling more than before the pandemic. 49 % say their travel habits are now similar to those before the pandemic. Only 18 % say they are travelling less. In addition, 44% of passengers surveyed say they will travel more in the next 12 months than in the previous 12 months. Only 7 % say they will travel less. While 48 % expect to maintain similar levels of travel over the next 12 months.
However, IATA points out that 2024 should mark the end of spectacular 3-figure increases from one year to the next. These percentages were in fact catch-ups following the collapse in traffic in 2020 and 2021.
Strong travel demand, combined with limited seat capacity, should further improve unit passenger revenue. This is expected to be 1.8% higher than in 2023. The occupancy rate should therefore reach 82.6 % in 2024. This would represent a slight improvement on 2023 (82 %)..
" Given the significant losses in recent years, net profit of $25.7 billion expected in 2024 is a tribute to the resilience of aviation. People love to travel, which has enabled airlines to return in force to pre-pandemic levels of connectivity. The speed of recovery has been extraordinary, but it also appears that the pandemic cost aviation around four years of growth. From 2024 onwards, the outlook indicates that we can expect more normal growth patterns for both passengers and freight." said Willie Walsh, Director General of IATA.
" The industry's profits need to be put into perspective. Although the recovery is impressive, a net profit margin of 2.7 % is well below what investors would accept in almost any other sector. Of course, many airlines are doing better than this average, and many are struggling. But there is a lesson to be learned from the fact that, on average, airlines keep only $5.45 per passenger carried. This is far too little to build a shock-resistant future for a vital global industry that accounts for 3.5 % of GDP and directly supports the livelihoods of 3.05 million people. Airlines will always be competing fierce competition to attract their customers, but they remain burdened by a onerous regulationsfragmentation, high infrastructure costs and a supply chain populated by oligopolies" insisted Willie Walsh.
