Airlines on track for R575bn profit in 2024, IATA predicts | Business
(Bruce Bennett/Getty Images)

(Bruce Bennett/Getty Images)

The global airline industry is set to generate $30.5 billion (about R575 billion) in net income this year, the International Air Transport Association predicted, amid higher ticket prices and a continued desire to travel following the pandemic.

The outlook compares with the $27.4 billion in profit achieved last year, IATA said at its annual general meeting in Dubai on Monday. It’s also more optimistic than the $25.7 billion that IATA predicted for this year in December. But while profit is rising, so are expenses, holding back earnings per passenger, IATA said. 

“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,” said IATA Director General Willie Walsh.

The global aviation industry has managed to bounce back from the pandemic that weighed heavily on airlines around the world and forced many to seek bailouts. While demand has returned, airlines still face range of fresh issues, from the lack of sustainable aviation fuel to a business with China that has yet to recover to geopolitical tensions curtailing some routes. 

Another major bottleneck is the shortage of available new aircraft that’s crimping capacity. Both Boeing Co. and Airbus SE are struggling to make planes fast enough to meet demand, and carriers around the world have hundreds of jets on back order.

“Resolving supply chain issues is of critical importance so we can deploy fleets efficiently to meet demand,” Walsh said. “And relief from the parade of onerous regulation and ever-increasing tax proposals would also help.”

By regions, IATA predicts North America will be the biggest contributor to industry profits, pulling in $14.8 billion. Europe will contribute $9 billion while the Middle East will achieve $3.8 billion, IATA said. 

International travel in Asia remains subdued, IATA said, held back by China, which remains below pre-Covid levels. 

“There is still a lot of pent-up demand for cross-border travel in the region, which will likely boost future growth prospects,” IATA said.

– Bloomberg

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