The International Air Transport Association (IATA) raised its profit forecast for the airline industry in 2024 and predicts revenue of $996 billion – a record high and a 9.7% jump on the previous year.
The profitability outlook for the year, released Monday, put expected net profits at $30.5 billion, up from the prior forecast of $25.7 billion published in December 2023, according to CNBC.
“With a record five billion air travelers expected in 2024, the human need to fly has never been stronger. Moreover, the global economy counts on air cargo to deliver the $8.3 trillion of trade that gets to customers by air,” Willie Walsh, IATAs director general, said in the organization’s press release.
But while revenues and profits are enjoying tailwinds, expenses are also soaring, leaving profit margins thin, the IATA report said.
“The airline industry is on the path to sustainable profits, but there is a big gap still to cover. A 5.7% return on invested capital is well below the cost of capital, which is over 9%,”
Walsh said.
“And earning just $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.” The IATA director called for tackling supply chain issues that have plagues the industry for years, as well as “relief” from what he called “the parade of onerous regulation and ever-increasing tax proposals.”
Source: Qatar News Agency