Global airlines to generate USD 1 trillion revenue in 2024

Dubai : Airlines will fly almost five billion passengers in 2024 and revenues will near USD 1 trillion, both record highs, said trade body International Air Transport Association on June 3.

IATA also said, it expected the world's airlines to post USD 30 billion in net earnings in 2024, up from its previous estimate of USD 25.7 billion.

However, total expenses are expected to hit a record high this year, climbing 9.4 per cent to USD 936 billion, IATA announced at its annual general meeting in Dubai.

This year's expected USD 30 billion profit "is a great achievement considering the recent deep pandemic losses", said Willie Walsh, Director General, IATA.

"Without a doubt, aviation is vital to the ambitions and prosperity of individuals and economies. Strengthening airline profitability and growing financial resilience is important," he added.

The Covid-19 pandemic plunged the aviation industry into crisis, grounding fleets and costing thousands of jobs. IATA put the losses at USD 183 billion between 2020 and 2022.

However, despite the expected bounce-back to record passengers and revenues of USD 996 billion in 2024, some clouds remain, he mentioned.

As well as the record expenses, the return on invested capital is estimated at 5.7 per cent in 2024, about 3.4 percentage points below the average cost of capital.

The net profit margin is just 3.1 per cent, amounting to about USD 6 per passenger-a slight improvement on 2023, which is estimated at USD 27.4 billion net profit with a 3.0 per cent margin.

"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 informed.

Airlines are facing a sharp rise in costs due to shortages of parts and labour, as well as challenges related to climate change, including flooded runways and forest fires.

After Doha in 2022, Istanbul in 2023 and Dubai this year, IATA's 2025 AGM will be held in New Delhi-the centre of an aviation boom, including record-breaking aircraft orders by Indian carriers.