The International Air Transport Association (IATA) has predicted that the global airline industry’s net profits are expected to reach $25.7 billion in 2024, representing. 2.7 per cent net profit margin.
The figure according to the global airline clearing house will be a slight improvement over 2023 which is expected to show a $23.3 billion net profit (2.6 per cent net profit margin).
This is just as it has been predicted that African airlines are expected to generate losses in both 2023 and 2024.
According to IATA, Africa as a continent remains a difficult market in which to operate an airline, with economic, infrastructure, and connectivity challenges impacting the industry’s performance.
However, despite the challenges, there is a robust demand for air travel.
Addressing journalists in Geneva, Switzerland, during the IATA Media Global Day, the director general of IATA, Willie Walsh in his presentation, equally predicted that in both2023 and 2024 the return on invested capital will lag the cost of capital by 4p.p as interest rates around the world have risen in response to the sharp inflationary impulse.
While airline industry operating profits are expected to reach $49.4 billion in 2024 from $40.7 billion in 2023, total revenues in 2024 are expected to grow 7.6 percent year over year to a record $964 billion.
As expense growth is predicted to be slightly lower at 6.9 for a total of &914 billion, some 4.7 billion people are expected to travel in 2024, a historic high that exceeds the pre-pandemic levels of 4.5 billion recorded in 2019.
Cargo volumes are also expected to be 58 and 61 million tonnes respectively.
IATA has, however, attributed the 25.7 billion net expected in 2024 to what it described as a tribute to aviation’s resilience.
According to Willie Walsh: People love to travel and that has helped airlines to come roaring back to pre-pandemic levels of connectivity. The speed of recovery has been extraordinary, yet it also appears that the pandemic has cost aviation about four years of growth. From 2024, the outlook indicates that we can expect more normal growth patterns for both passenger and cargo.”
Passenger revenues are also expected to reach $717 billion in 2024, up 12 percent from $642 billion in 2023.
While revenue passenger kilometers (RPKs) growth is expected to be 9.8 year on year, cargo revenues are expected to fall to $111 billion in 2024 which is down sharply from an extraordinary peak of $210 billion in 2021.
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