IATA Forecasts 2.7% Net Profit Margin, Record 2024 Revenues

IATA Forecasts 2.7% Net Profit Margin, Record 2024 Revenues

DALLAS — The International Air Transport Association (IATA) has announced strengthened profitability projections for airlines in 2023, which are expected to largely stabilize in 2024. Here are the key points:

  • Profitability Projections: The airline industry’s net profits are expected to reach $25.7 billion in 2024, with a 2.7% net profit margin, showing a slight improvement over the $23.3 billion net profit (2.6% net profit margin) expected in 2023.
  • Return on Invested Capital: In both 2023 and 2024, the return on invested capital is expected to lag the cost of capital by 4 percentage points due to increased interest rates globally.
  • Operating Profits and Revenues: Airline industry operating profits are expected to reach US$49.3 billion in 2024, with total revenues expected to grow by 7.6% year over year to a record US$964 billion. Expense growth is expected to be slightly lower at 6.9% for a total of US$914 billion.
  • Passenger and Cargo Volumes: It is expected that 4.7 billion people will travel in 2024, exceeding the pre-pandemic level of 4.5 billion recorded in 2019. Cargo volumes are expected to be 58 and 61 million metric tons in 2023 and 2024, respectively.
  • Outlook Drivers: Overall revenues in 2024 are expected to rise faster than expenses, strengthening profitability. Passenger revenues are expected to reach US$717 billion in 2024, up 12% from 2023, with revenue passenger kilometers (RPKs) growth expected to be 9.8% year over year.
  • Risks: Industry profitability is fragile and could be affected by global economic developments, war, supply chain issues, and regulatory risks.
  • Regional Roundup: North America, Europe, and the Middle East are expected to post net profits in 2023 and 2024, while Asia Pacific, Latin America, and Africa are expected to have varying financial performances.
  • Traveler’s Viewpoint: A recent public opinion poll revealed that 97% of travelers expressed satisfaction with their travel, and 88% agreed that air travel makes their lives better.

Featured image: Fort Lauderdale- Hollywood International Airport. Photo: Helwing Villamizar/Airways

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