Airline Profitability Outlook Improves for 2024 including Africa Says , IATA Director General Walsh

  • Total global Airlines industry net profits expected to reach US$30.5bn representing a 3.1% net profit margin
  • The industry also registered total revenues of US$996bn from flying 4.96b people
  • Sadly , Africa receives only less than 2% of this revenue
  • The poor Africa performance in revenues generated is due to the lack of connectivity on the continent
  • Air industry transported 62m tonnes of air cargo

African airlinesare expected to post a US$0,1bn combined net profit in 2024 with a 0.6% profit margin and a US$0,90 profit margin per passenger carried according ,to the International Air Travel Association , (IATA), Director General , Mr. Willie Walsh.

Addressing the IATA AGM and World Air Transport Summit held at sprawling Marriot Marquis hotel in Dubai, UAE, Walsh noted that Africa still has a high operational cost base and  a low propensity to spend on air travel.

Moreover, connectivity challenges dampen the industry’s expansion and performance. Despite these headwinds, there is sustained demand (8.5% growth) for air travel, which should allow the market to deliver a second year of profitability, Walsh told the global assembly of industry captains  and the media with well over 2,000 dlegetaes from across the world in attendance .

IATA Director General ,Willie Walsh , addressing the global media shortly after he delivered a pointed report about the Airlines Industry at the IATA AGM in Dubai. He is flanked by the outgoing IATA Board of Governors Chair, and CEO of Rwandair , Yvonne Yvonne Manzi Makolo

“In a world of many and growing uncertainties, airlines continue to shore-up their profitability. The expected aggregate net profit of $30.5 billion in 2024 is a great achievement considering the recent deep pandemic losses.

With a record five billion air travelers expected in 2024, the human need to fly has never been stronger. Moreover, the global economy counts on air cargo to deliver the $8.3 trillion of trade that gets to customers by air,” a forceful Walsh stated adding ,that without a doubt, aviation is vital to the ambitions and prosperity of individuals and economies.

“Strengthening airline profitability and growing financial resilience is important. Profitability enables investments in products to meet the needs of our customers and in the sustainability solutions we will need to achieve net zero carbon emissions by 2050,” said Willie Walsh, IATA’s Director General. 

He added , the airline industry is on the path to sustainable profits, but there is a big gap still to cover. A 5.7% return on invested capital is well below the cost of capital, which is over 9%. And earning just $6.14 per passenger is an indication of just how thin our profits are—barely enough for a coffee in many parts of the world.

To improve profitability, Walsh said there was urgent need  to resolve supply chain issues  of critical importance so in order for airlines to deploy fleets efficiently to meet demand.

The director General called for relief from the parade of onerous regulation and ever-increasing tax proposals espeicall in the European markets.

“ An emphasis on public policy measures that drive business competitiveness would be a win for the economies, for jobs, and for connectivity. It would also place us in a strong position to accelerate investments in sustainability,” Walsh argued.

He was optimistic  that with their data backed projections , industry revenues are expected to reach an historic high of $996 billion in 2024. 

Passenger revenues are expected to reach $744 billion in 2024, up 15.2% from $646 billion in 2023. Revenue passenger kilometers (RPKs) growth is expected to be 11.6% year on year. The long-term 20-year growth trend is expected to see passenger demand grow 3.8% annually for the 2023-2043 period.

He attributed these positive outlook to the ever-increasing affordability for air travel, even if the figures are somewhat skewed by shorter journey distances in 2024 due to the slower pace of recovery in some long-haul markets. 

In line with this, IATA’s April 2024 polling data revealed that 77% of respondents agree that air travel is good value for money.

The average passenger load factor is expected to be 82.5% in 2024. This is largely in line with pre-pandemic levels (82.6% in 2019) and reflects tight supply and demand conditions from ongoing supply chain issues for aircraft and engines. 

Cargo revenues 

On a rather not encouraging note , Walsh told the IATA AGM that  cargo revenues are expected to fall to $120 billion in 2024 (from $138 billion in 2023). Both 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). 

According to Walsh , the fall in cargo revenues is due to the  significant belly capacity that entered the market in 2023 in tandem with the recovery of passenger travel following  a battering three year plus Covid 19 pandemic .

“In general, air cargo is in a period of correction following an exceptional year in 2021. Yields, capacity growth, the belly-dedicated freighter split, and other key metrics are moving from the extraordinary mid-pandemic situation towards a continuation of pre-pandemic trends and levels, “ the Director General explained .



Writer is a media and communications consultant And Advocate of the High Court of Uganda

Leave a Reply

Your email address will not be published. Required fields are marked *