According to the International Air Transport Association(IATA), airline profits are projected to reach record highs in 2024. The IATA group based in Montreal said on Wednesday, the total revenue of the airline industry is expected to grow at a CAGR of 7.6% to $964 billion in 2024.
More than 4.7 billion passengers were recorded traveling by air, exceeding the previous pre-pandemic level of 4.5 billion recorded in 2019.
The global airline sector has largely recovered from the COVID-19 pandemic, which saw air travel die down, as demand has boomed across regions like North America, Europe, and the Middle East.
According to the International Air and Transport Association, the airline industry is expected to register a net profit of $23.3 billion on a net margin of 2.6%. Moreover, it is expected to reach $25.7 billion and a margin of 2.7% in 2024.
Willie Walsh, IATA’s director general, said- “Considering the major losses of recent years, the $25.7 billion net profit expected in 2024 is a tribute to aviation’s resilience. The speed of the recovery has stood extraordinary, yet it also appears that the pandemic has cost aviation about four years of growth."
He also commented that the 1.7% profit margin “is far below what investors in almost any other industry would accept." He also blamed stiff regulation, high infrastructure costs, and supply chain issues for the slow growth of the industry.
Still, the number of air travelers globally is set to rise to historic levels since the pandemic. 4.7 billion people are expected to travel in 2024, compared to 4.5 billion in 2019.
Furthermore, many major countries like China where international travel is still 40% below pre-pandemic levels, will register a profit again in 2024.
However, global instability, mainly the Israel-Hamas war and the Ukraine war could become a hindrance and negatively impact the sector, especially if they continue to drive up oil prices.
