Global airline industry to post $30.5 bln net profit, $996 bln revenue in 2024

Dubai: The global airline industry is projected to report a higher net profit of USD 30.5 billion and record revenue of nearly USD 1 trillion, IATA said on Monday as the sector is growing profitably after recovering from the coronavirus pandemic impact.

The number of air travellers is expected to touch five billion this year.

The International Air Transport Association (IATA), which represents more than 330 airlines, however, said the return on invested capital is expected to be 5.7 per cent, which is 3.4 per cent lower than the average cost of capital in 2024.

Industry revenue is expected to reach an historic high of USD 996 billion while passenger revenue is projected to be 15.2 per cent higher at USD 744 billion this year.

"Profitability is expected to strengthen in 2024 as revenues grow slightly faster than expenses (+9.7 per cent vs +9.4 per cent, respectively)...net profits, however, are expected to grow slightly more slowly at +11.3 per cent from USD 27.4 billion estimated for 2023 to USD 30.5 billion estimated for 2024," IATA said in a release.

The industry's expenses are expected to rise to USD 936 billion this year, which will be 9.4 per cent higher than 2023.

Fuel is expected to average USD 113.8/barrel in 2024 translating into a total fuel bill of USD 291 billion, accounting for 31 per cent of all operating costs, according to the outlook released at the IATA annual general meeting here.

IATA's Director General Willie Walsh said the expected aggregate net profit of USD 30.5 billion in 2024 is a great achievement considering the recent deep pandemic losses.

He noted that a record five billion air travellers are expected in 2024.

"A 5.7 per cent return on invested capital is well below the cost of capital, which is over 9 per cent. And earning just USD 6.14 per passenger is an indication of just how thin our profits are, barely enough for a coffee in many parts of the world," Walsh said.

The grouping has flagged wars and supply chain issues as among the risks.