The global airline industry’s revenue is projected to grow 7.6 per cent year on year to a record $964 billion in 2024, driven by high demand for travel, according to the International Air Transport Association(Iata).
The aviation trade body forecasts the industry's net profit to surge by more than 10 per cent annually to $25.7 billion next year, after bouncing back to pre-pandemic levels, it said on Wednesday.
“People love to travel and that has helped airlines to come roaring back to pre-Covid pandemic levels of connectivity,” said Willie Walsh, Iata's director general.
About 4.7 billion people are expected to travel next year, exceeding the pre-pandemic level of 4.5 billion recorded in 2019, as per Iata estimates.
Geneva-based Iata’s latest data supports the industry’s optimism.
Its November passenger polling data found 44 per cent of respondents will travel more next year than last.
About one third of travellers polled say they are travelling more than they did pre-pandemic and 49 per cent said their travel habits are now similar to before Covid.
“The speed of the recovery has been extraordinary … yet it also appears that the pandemic has cost aviation about four years of growth,” Mr Walsh said. "From 2024, the outlook indicates that we can expect more normal growth patterns for both passenger and cargo."
Next year, the airline industry’s operating profits are expected to increase to $49.3 billion from $40.7 billion this year. Cargo volumes are expected to reach 58 million and 61 million tonnes in 2023 and 2024, respectively.
Expenses are expected to increase by 6.9 per cent annually to $914 billion next year, Iata said.
Passenger revenue is forecast to reach $717 billion in 2024, an annual jump of 12 per cent. An inventory of 40.1 million flights is expected to be available in 2024, exceeding the 2019 level of 38.9 million and up from the 36.8 million flights expected this year.
Reflecting the tight supply and demand conditions, efficiency levels are high with the load factor expected to be 82.6 per cent in 2024, slightly better than the 82 per cent recorded this year and in 2019.
Load factor is a metric that measures the percentage of available seating capacity that has been filled with passengers.
Cargo revenue is expected to fall to $111 billion in 2024 from a peak of $210 billion in 2021 but it is above 2019 revenue of $101 billion.
Airlines are expected to consume 99 billion gallons of fuel in 2024 and produce 939 million tonnes of carbon dioxide emissions.
Iata said fuel price is expected to average $113.8 per barrel next year, which will translate into a total fuel bill of $281 billion, accounting for 31 per cent of all operating costs.
However, Iata noted industry profitability is fragile and could be affected (positively or negatively) by various factors. These include global economic developments, wars, supply-chain disruption and regulatory risks.
“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 Mr Walsh.
North America remains the standout region in terms of financial performance, Iata revealed. It was the first market to return to profitability last year and build on this performance in 2023 by delivering efficiency particularly in high passenger load factors.
The Middle East is expected to deliver a strong financial performance both this year and next. Its airlines have been “swift to rebuild their international networks and restore their super-connector hubs”, Iata said.