Airlines Are Forecast to Set New Revenue Records in 2024

The airline industry continues to grow in 2023 and 2024, based on hopeful but cautious predictions from the International Air Transport Association (IATA). In line with their most recent estimate, airlines should see increased profitability in 2023 before further stability in 2024.

The IATA predicts a 2.7% net profit margin in 2024, slightly up from 2023, but inflation and global interest rate rises will lead to a return on invested capital below the cost of capital.

Highlights of the forecast:

• The airline industry is projected to generate $25.7 billion in net profits in 2024, a slight improvement from the projected $23.3 billion in 2023.
• Interest rates have increased globally in reaction to the strong inflation action, return on invested capital will trail the cost of capital by 4 percentage points in 2023 and 2024.
• The airline sector is expected to see a 7.6% annual increase in operating profits from 40.7% billion in 2023 to 49.3% billion in 2024.
• The report predicts a 7.6% annual increase in total revenues to reach a record $964 billion in 2024.
• A little lower rate of 6.9% expense growth is expected, totaling $914 billion.
• A new record of 4.7 billion people is expected to travel in 2024, breaking the 4.5 billion before the pandemic figure that was seen in 2019.
• In 2023 and 2024, respectively, the amounts of cargo are expected to be 58 and 61 million tonnes.

In 2024, the industry expects to reach a record high with $964 billion in revenues. There will be 40.1 million flights available, surpassing the 2019 level of 38.9 million and the expected 2023 level of 36.8 million flights.

In 2024, passenger revenues are expected to hit $717 billion, up 12% from 2023. The growth in revenue passenger kilometers (RPKs) is projected at 9.8%, more than double the pre-pandemic trend. However, 2024 is likely to mark the end of significant year-on-year increases seen during the recovery from 2021 to 2023.

More people wanting to travel and limited capacity due to ongoing supply chain issues are pushing up yields. In 2024, passenger yields are expected to go up by 1.8% from 2023. The efficiency levels, showing how well things are working with supply and demand, are expected to be strong, giving us an 82.6% load factor in 2024—just a bit better than 2023 (82%) and the same as 2019.