Airlines increase profits, record number of travelers choose the plane

Global airlines raised their profit forecast for 2024 at a time when record numbers of travelers are choosing to fly. The International Air Transport Association - IATA - said it expected the industry worldwide to generate $30.5 billion in profit this year, up from a revised $27.4 billion in 2023, as carriers keep a cap on basic labor costs despite strikes. the last. This comes just four years after the industry collapsed to a $140 billion loss in 2020 as a result of the pandemic.

However, the airline industry warned that its ability to service a strong recovery in travel demand is being hampered by disruption to global supply chains, including deliveries of its fleet.

Passenger yield – or the average amount paid by a passenger to fly one mile – is expected to increase by 3.2% compared to 2023, IATA confirmed. In part, this is because capacity growth is limited, driving up average prices. In contrast, the corresponding figure for cargo is expected to fall 17.5% in 2024 as freight returns to normal post-pandemic patterns. Airline activity is widely seen as a test of business or consumer confidence as well as trade.

The industry has high fixed costs and regulations that discourage most cross-border mergers, meaning it remains fragmented. The margin remains thin; as a difference of just over 3% is still recorded. This performance is still far below the level where the industry should be.

In Asia, IATA tripled its industry profit forecast for 2024 to $2.2 billion, despite a slow recovery in international travel in China. At $14.9 billion, unchanged from previous forecasts, North America remains the most profitable region with strong consumer spending despite cost-of-living pressure.

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