Global airlines poised for 2.7% jump in profit in 2024, IATA
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Global airlines poised for 2.7% jump in profit in 2024, says IATA

Global airlines poised for 2.7% jump in profit in 2024, says IATA

Industry profits will reach $25.7bn in 2024, which is a slight improvement over this year’s $23.3bn

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Total passenger traffic rises 64.4% in 2022

Global airlines are poised for record profits this year and will extend the gains in 2024, driven by pent-up demand for air travel as the aviation industry has largely recovered from the impact of the Covid-19 pandemic, according to the International Air Transport Association (IATA).

IATA projected that industry profits will reach $25.7bn (2.7 per cent net profit margin) in 2024, which is more than double what the global aviation body expected in June and a slight improvement over this year’s $23.3bn.

The industry’s operating profits are set to hit the $49.3bn mark in 2024 from $40.7bn this year while revenues are tipped to grow 7.6 per cent year-over-year (YoY) to a record $964bn.

“Considering the major losses of recent years, the $25.7bn 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,” said Willie Walsh, IATA’s director general.

“From 2024 the outlook indicates that we can expect more normal growth patterns for both passenger and cargo.”

However, though the speed of the recovery in the global aviation sector has been extraordinary, the pandemic has cost aviation about four years of growth. IATA cautioned that higher interest rates “in response to the sharp inflationary impulse” are driving up the cost of capital and hurting profit margins.

IATA on the Middle East

IATA said the recovery in the industry will not be the same across the globe.

Airlines in the Middle East are expected to deliver a strong financial performance in both 2023 and 2024, with profits seen advancing by 4.3 per cent to $2.6bn in 2023 and $3.1bn next year on a 4.8 per cent margin.

The Middle East carriers, including Emirates Airlines, Air Arabia and Qatar Airways, have been swift to rebuild their international networks and restore their super-connector hubs.

Capacity is expected to grow faster than demand in 2024 and IATA expects more efficient fleets to potentially boost net profit margin.

Emirates posted $2.6bn (Dhs9.4bn) in half-year profit from Dhs4bn for the same period a year ago, while its revenues soared by 19 per cent Dhs59.5bn from Dhs13.7bn – driven by strong passenger demand for international travel across markets.

Sharjah-based Air Arabia reported a 53 per cent increase in nine-month profit to Dhs1.32bn from Dhs867m during the corresponding period a year earlier.

The budget carrier added a total of 17 new routes to its global network during the period under review while capacity available across all hubs increased by 33 per cent.

Read: Emirates Group reports record $2.7bn half-year profit

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