In 2024, airlines are projected to transport nearly five billion passengers, reaching a new record high, according to the International Air Transport Association (IATA). Additionally, IATA forecasts that revenues will surge close to $1 trillion, another record-breaking achievement. This positive outlook comes as the aviation industry bounces back after the challenging period caused by the pandemic.
During its annual general meeting in Dubai, IATA also revised its net earnings estimate for this year, expecting the world's airlines to generate $30 billion in profit, surpassing its previous projection of $25.7 billion. However, it is worth noting that total expenses are anticipated to reach a record high of $936 billion, marking a 9.4 percent increase.
IATA's director general, Willie Walsh, expressed his satisfaction with the projected profit, stating that it is a remarkable accomplishment considering the significant losses experienced during the pandemic. He emphasized the crucial role of aviation in driving individual and economic prosperity, highlighting the importance of enhancing airline profitability and financial resilience.
Undoubtedly, the Covid-19 crisis severely impacted the air industry, leading to grounded fleets and substantial job losses. However, with the industry's recovery underway, there is optimism for a brighter future ahead.
IATA reported losses totaling $183 billion from 2020 to 2022. Despite the anticipated rebound in passenger numbers and revenues to reach $996 billion this year, the aviation industry still faces challenges ahead.
In addition to the high expenses, the return on invested capital is projected to be 5.7 percent in 2024, which is 3.4 percentage points lower than the average cost of capital. "The global airline industry continues to struggle to achieve a return above the cost of capital," according to IATA.
Airlines are grappling with increasing costs due to parts and labor shortages, as well as climate change-related issues such as flooded runways and forest fires.
Just six weeks ago, Dubai's airport, the busiest for international passengers, had to shut down due to severe flooding that caused standing water on the runway and led to the cancellation of over 2,000 flights.
The intense rainfall in the arid United Arab Emirates may have been worsened by human-induced global warming, as suggested by a group of international scientists studying extreme weather events.
IATA, an organization that includes over 300 airlines accounting for 83 percent of global air traffic, announced that their next AGM will take place in New Delhi, India. This decision comes as India experiences a surge in aviation activities, highlighted by Air India's significant order of 470 aircraft in the previous year.
According to IATA, airlines are projected to see a 15 percent increase in operating profits, reaching $59.9 billion. However, net profits are expected to grow at a slower rate of 11.3 percent.
