IATA Shares Profit Projections for 2024

During the annual end-of-year press meeting held in Geneva, Switzerland, the International Air Transport Association (IATA) reported that it expects the industry to close 2023 with profits of USD 23.3 billion. This projection represents a net margin of 2.6% and is the first positive margin following three years of record losses from the COVID-19 pandemic.

However, recent projections from IATA show airline revenue for 2023 to reach USD 896 billion, USD 93 billion higher than forecasted during the press conference.

The 2024 Outlook

Approximately 4.7 billion people are expected to travel in 2024, which may mark a historic high exceeding pre-pandemic levels.
Passenger revenue is expected to increase by 12% to USD 717 billion.
Airline revenue is expected to grow by 7.6% to a record USD 964 billion with a profit of USD 25.7 billion.

IATA's Director General, Willie Walsh, said: "Considering the major losses of recent years, the $25.7 billion net profit expected in 2024 is a tribute to aviation's resilience. People love to travel and that has helped airlines to come roaring back to pre-pandemic levels of connectivity. The speed of the recovery has been extraordinary; yet it also appears that the pandemic has cost aviation about four years of growth.

"Industry profits must be put into proper perspective. While the recovery is impressive, a net profit margin of 2.7% is far below what investors in almost any other industry would accept. Of course, many airlines are doing better than that average, and many are struggling. But there is something to be learned from the fact that, on average airlines will retain just $5.45 for every passenger carried. That's about enough to buy a basic 'grande latte' at a London Starbucks. But it is far too little to build a future that is resilient to shocks for a critical global industry on which 3.5% of GDP depends and from which 3.05 million people directly earn their livelihoods. 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," concluded Walsh.

Latin America yet to clear the red

Airlines in Latin America and the Caribbean were expected to close 2023 with losses of USD 600 million despite showing the highest level of recovery of 106% compared to 2019, representing a net profit margin of -1.5%. However, 2024 projections show a loss reduction to USD 400 million, with the net margin improving to -0.8%.

With global improvement across all areas in the industry, Brookfield Aviation International believes that the resilience shown by the aviation landscape in recent years is undoubtedly a product of carefully designed contingency plans in terms of staffing, insurance, and infrastructure, as well as the industry's capacity to adapt to events of uncertainty.

With over 30 years in the industry providing world-class services to its clients, Brookfield believes that a reliable contingency plan covers payroll solutions, comprehensive insurance, contract management, and CAMO services, all tailor-made to allow for growth even in times of crisis.

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