Aviation industry revenue to reach historic $996 billion in 2024, says IATA

 

…Expenses to grow to $936 billion in 2024

Wole Shadare, Dubai

Aviation industry revenues are expected to reach a historic high of $996 billion in 2024, just as passenger revenues are expected to reach $744 billion in 2024, up 15.2% from $646 billion in 2023 according to the International Air Transport Association (IATA).

It however expressed concern that industry profitability is fragile and could be affected positively or negatively by many factors such as global economic developments, wars, supply chain issues, regulatory risks, public policy and other factors.

  Airline prospects have historically been closely linked to global economic trends. Nonetheless, the sector has been largely resilient in the face of inflation, high interest rates, and slowing GDP growth in the post-pandemic period.

President, Emirates, Tim Clark, RwandAir CEO, Yvonne Mamzi Makolo and DG of IATA, Willie Walsh at a press briefing at IATA 80TH AGM in Dubai

Economic developments in China should be closely watched. Slowing growth, youth unemployment, and the relative strength of the service sector over manufacturing are all indications that China’s economy is in transition, which could have broad impacts beyond its borders.

READ ALSO:  Sirika says Nigeria Air, investment between nation’s entrepreneurs, Ethiopian consortium

Revenue passenger kilometres (RPKs) growth is expected to be 11.6% year on year, with the long-term term 20-year growth trend is expected to see passenger demand grow 3.8% annually for the 2023-2043 period.

The airline body at the 80th Annual General Meeting (AGM) and the World Air Transport Summit holding in Dubai, United Arab Emirates (UAE) announced strengthened profitability projections for airlines in 2024 compared with its June and December 2023 forecasts.

It noted that an aggregate return above the cost of capital, however, continues to elude the global airline industry.

The Director-General of IATA, Willie Walsh also disclosed that Industry expenses are expected to grow to $936 billion in 2024 (+9.4% on 2023) while Cargo revenues are expected to fall to $120 billion in 2024 (from $138 billion in 2023).

READ ALSO:  Nigeria to deploy safety tool for airspace safety

Both according to him are down sharply from the extraordinary peak of $210 billion in 2021, but it is above 2019 revenues, which were $101 billion and an improvement on the previous forecast of $111 billion (announced in December 2023).

Fuel is expected to average $113.8/barrel (jet) in 2024 translating into a total fuel bill of $291 billion, accounting for 31% of all operating costs.

High crude oil prices are expected to continue to be further exaggerated for airlines as the crack spread (premium paid to refine crude oil into jet fuel) is expected to average 30% in 2024.

An inventory of 38.7 million flights is expected to be available in 2024. This is 1.4 million flights below previous estimates (December 2023) largely attributable to the slowing pace of deliveries in the face of persistent supply chain issues in the aerospace sector.

READ ALSO:  Capt. Ado Sanusi leaves Aero Contractors

For example, the number of aircraft deliveries scheduled for 2024 is expected to be 1,583, which is 11% less than the expectations published just months ago that anticipated 1,777 aircraft would join the global fleet in 2024. Airlines are deploying larger aircraft as a mitigating strategy.

IATA

Walsh noted that aviation remains committed to its goal of achieving net zero carbon emissions by 2050. Travellers are expressing high levels of confidence in this commitment, with 82% believing it is the right goal, 76% saying that we will be able to fly sustainably, and 78% agreeing that aviation leaders are taking the climate challenge seriously.

 

Wole Shadare