IATA: Historic 4.7 billion people expected to travel in 2024

Some 4.7 billion people are expected to travel in 2024, an historic high that exceeds the pre-pandemic level of 4.5 billion recorded in 2019, according to the International Air Transport Association (IATA).

IATA announced strengthened profitability projections for airlines in 2023, which will then largely stabilise in 2024. However, net profitability at the global level is expected to be well below the cost of capital in both years. Very significant regional variations in financial performance remain.

In its outlook report, IATA said that 4.7 billion people are expected to travel in 2024, an historic high that exceeds the pre-pandemic level of 4.5 billion recorded in 2019.

IATA said the airline industry’s net profits are expected to reach $25.7 billion in 2024 (2.7% net profit margin). “That will be a slight improvement over 2023 which is expected to show a $23.3 billion net profit (2.6% net profit margin),” IATA said.

It added that in both 2023 and 2024, return on invested capital will lag the cost of capital by 4pp, as interest rates around the world have risen in response to the sharp inflationary impulse.

Airline industry operating profits are expected to reach $49.3 billion in 2024 from $40.7 billion in 2023, while total revenues in 2024 are expected to grow 7.6% year over year to a record $964 billion.

Expense growth is expected to be slightly lower at 6.9% for a total of $914 billion.

Finally, cargo volumes are expected to be 58 and 61 million tonnes in 2023 and 2024, respective

“Considering the major losses of recent years, the $25.7 billion net profit expected in 2024 is a tribute to aviation’s resilience. People love to travel and that has helped airlines to come roaring back to pre-pandemic levels of connectivity. 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,” said Willie Walsh, IATA’s Director General.

“Industry profits must be put into proper perspective. While the recovery is impressive, a net profit margin of 2.7% is far below what investors in almost any other industry would accept. Of course, many airlines are doing better than that average, and many are struggling. But there is something to be learned from the fact that, on average airlines will retain just $5.45 for every passenger carried. That’s about enough to buy a basic ‘grande latte’ at a London Starbucks. But it is far too little to build a future that is resilient to shocks for a critical global industry on which 3.5% of GDP depends and from which 3.05 million people directly earn their livelihoods. Airlines will always compete ferociously for their customers, but they remain far too burdened by onerous regulation, fragmentation, high infrastructure costs and a supply chain populated with oligopolies,” said Walsh.

Read the full report here.

(Source: IATA, Photo by Oleksandr P., Pexels)