Airline profits will stabilize in 2024 as continued growth in post-pandemic travel will be offset by high capital costs and capacity constraints. This was announced today by the International Air Transport Association (IATA), quoted by Reuters and BTA.
The global air sector has largely recovered from the COVID-19 pandemic, which has led to flight disruptions and passengers' reluctance to fly, with demand rising in North America, the Middle East and Europe.
The airline sector has returned to profitability in 2023, with net profit expected to be $23.3 billion at a margin of 2.6 percent and reach $25.7 billion at a margin of 2.7 percent next year, the airline said.
While revenue is forecast to reach a record $964 billion, the high cost of capital due to rising interest rates is worrying, according to the association.
The number of global commuters is expected to jump to historic levels, with 4.7 billion people expected to travel in 2024, up from 4.5 billion in 2019.
Many countries that have recovered travel more slowly, such as China, where international flights are still 40 percent below pre-pandemic levels, will again profit in 2024.
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Global instability, including the war between Israel and Hamas, could negatively affect the sector, the industry group warned, especially as they raise oil prices.
Fuel prices are expected to account for 31 percent of airline operating costs.
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