The airline industry is expected to finish 2023 with net profits of $23.3 billion – a net profit margin of 2.6 percent – and reach $25.7 billion in 2024, according to data from the International Air Transport Association. The industry is forecast to end the year with operating profits of $40.7 billion in 2023, a number that will increase to $49.3 billion in 2024.
Total revenues in 2024 are expected to grow 7.6 percent year over year to a record $964 billion. The growth in expenses for the industry is expected to be slightly lower next year at 6.9 percent for a total of $914 billion.
“Considering the major losses of recent years, the $25.7 billion net profit expected in 2024 is a tribute to aviation’s resilience,” said Willie Walsh, IATA’s Director General. “The speed of the 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.”
IATA figures show passenger revenues climbing to $717 billion in 2024, up 12 percent from $642 billion in 2023, while revenue passenger kilometers (RPKs) growth is expected to be 9.8 percent year on year. That’s more than double the pre-pandemic growth trend, but 2024 is expected to mark the end of the dramatic year-on-year increases driven by the recovery in 2021-2023.
In addition, IATA says that there continue to be significant regional variations in financial performance. North America, Europe and the Middle East are expected to post net profits in 2023. Asia Pacific will join the group in 2024, but the organization says it still expects Latin America and Africa to be in the red in 2024.
However, while conditions for continued industry profitability are favorable, the outlook is fragile and could be affected (positively or negatively) by many factors. Economic weakness could dampen the strong consumer demand that has supported the recovery, regional conflicts continue to threaten global stability and supply chain issues are still affecting worldwide trade and business.
Nevertheless, passenger sentiment revealed in IATA’s November 2023 polling data remains optimistic. The survey found 44 percent say that they will travel more in the next 12 months than in the previous 12 months and 48 percent expect to maintain similar levels of travel next year. Only 7 percent say they will travel less in the coming 12 months.
