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Record profits expected for airlines in 2024 with more than five billion passengers



Record profits expected for airlines in 2024 with more than five billion passengers

The International Air Transport Association said Monday it expects airlines to make record profits estimated at around $1 trillion with more than five billion passengers worldwide during 2024 , exceeding the revenues achieved in 2019 before the outbreak of the Corona virus. hit the sector.

Airlines expect to carry more than five billion passengers globally this year, surpassing the record number reached in 2019 before the outbreak of the Covid-19 pandemic, and achieving a turnover of one trillion dollars, according to the International Air Transport Association. said Monday.

In this context, the IATA Federation, which is holding its general assembly in the Emirati city of Dubai, announced that it also expects to achieve net global financial gains in 2024 amounting to $30.5 billion, a notable increase from its previous expectation of $25.7 billion. . Total expected spending is also at a record high this year, increasing 9.4 percent to $936 billion, according to IATA.

Great success after losses caused by the Corona virus pandemic

The Federation’s chief executive, Willie Walsh, told delegates from his organization, which brings together 320 airlines representing 83 percent of global air traffic, that the hoped-for results represent “a great success in light of the recent massive losses due to the Covid-19 pandemic.” He added: “There is no doubt that aviation is vital to the ambitions and prosperity of individuals and economies. It is important to improve airline profitability and financial strength.”

The global pandemic has led to huge losses in the aviation sector, with fleets grounded and thousands of jobs lost. The International Air Transport Association estimates these losses at around $183 billion between 2020 and 2022.

The number of passengers traveling is expected to reach 4.96 billion people this year, far surpassing the record number of 4.54 billion recorded in 2019. The Union initially hoped that the number of air travelers would reach 4.7 billion in 2024.

Hazy skies in the aviation sector

But despite this year’s expected recovery in passenger numbers and revenues amounting to $996 billion, some uncertainty still hangs over this sector. Besides standard expenses, the return on invested capital is estimated to be around 5.7% in 2024, about 3.4 percentage points lower than the average cost of capital.

The International Air Transport Association has stated that “a total return above the cost of capital…remains out of reach for the global aviation industry.”

Airlines are also facing a sharp increase in costs due to shortages of spare parts and labor and challenges linked to climate change, including runways affected by flooding and wildfires. Six weeks ago, Dubai Airport, the world’s busiest airport for international passengers, was closed due to severe flooding that left standing water on the runway and forced authorities to cancel more than two thousand flights.

Heavy rainfall in the United Arab Emirates desert is likely to have been exacerbated by human-caused global warming, according to an international group of scientists studying extreme weather events.

Implications of climate change

On the other hand, some experts have sounded the alarm on climate change after two major incidents of air turbulence that two planes encountered in recent days, one of which resulted in the death of a British passenger who was traveling on a Singapore Airlines flight.

After Doha in 2022, Istanbul in 2023 and Dubai this year, the International Air Transport Association announced that it would hold its meeting next year in the city of New Delhi, India, which is experiencing a boom in the airline sector, notably that of Air India. record purchase order of 470 planes last year.

The union added that airline operating profits are expected to rise about 15 percent to $59.9 billion, although net profits will grow more slowly at 11.3 percent.

France 24/AFP

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