Airlines Leave the Red: 2023 to Close with USD 23.3 Billion in Net Profits

During its annual end-of-year press meeting held in Geneva, Switzerland, the International Air Transport Association (IATA) reported that it expects the industry to close 2023 with profits of USD 23.3 billion, representing a net margin of 2.6%, the first positive margin after three years of record losses due to the COVID-19 pandemic.

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The forecast for 2024 indicates that net profits will climb to USD 25.7 billion, with the net margin reaching 2.7%.

«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», said  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.

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«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,» concluded Walsh.

Airlines Poised for Profitable 2024 Despite Economic Headwinds

Geneva, December 6, 2023 – The International Air Transport Association (IATA) has revealed a positive outlook for the airline industry, projecting significant profitability in the coming year. Despite economic challenges and high operational costs, airlines are expected to see a 2.7% net profit margin in 2024, a slight increase from the 2.6% margin forecast for 2023.

Key Highlights

1. Net Profit Projections: Airlines are set to achieve a net profit of $25.7 billion in 2024, up from $23.3 billion in 2023. This marks a noteworthy recovery from the losses incurred during the COVID-19 pandemic.
2. Revenue and Expense Trends: Total revenue for 2024 is anticipated to reach a record $964 billion, a 7.6% increase year-over-year. Expenses are also expected to rise, albeit at a slightly lower rate of 6.9%, totaling $914 billion.
3. Passenger and Cargo Growth: Approximately 4.7 billion people are projected to travel in 2024, surpassing pre-pandemic levels. Cargo volumes are also expected to grow, reaching 61 million tonnes in 2024.
4. Operating Profits: Operating profits are forecasted to reach $49.3 billion in 2024, a significant increase from $40.7 billion in 2023.

Latin America, still in the red

Despite showing the highest level of recovery in demand compared to 2019 (106%), airlines in Latin America and the Caribbean will close 2023 with losses of USD 600 million, representing a net margin of -1.5%.

In 2024, losses are expected to reduce to USD 400 million, with the net margin improving to -0.8%. That year, demand (in RPK) is projected to grow 7.4% both versus 2019 and 2023, while capacity will increase by 7.8% compared to 2023 and 7.4% compared to 2019.

 

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