IATA AGM Wellie Walsh
Willie Walsh, IATA’s Director-General, was speaking at the International Air Transport Association (IATA) annual meeting and world travel summit being held in Dubai. Image Credit: Supplied

Dubai: Airlines worldwide have raised their profit forecast for 2024 as industry-wide revenues near $1 trillion with new records being set for traveller numbers.

The International Air Transport Association (IATA) released its report on Monday at its annual general meeting (AGM) in Dubai. It anticipates the industry will generate $30.5 billion in profit this year, surpassing the revised $27.4 billion in 2023, as carriers manage labour costs, supply chain constraints, and disruptions caused by geopolitical challenges.

Willie Walsh, Director-General of IATA, said: “For 2024, we expect record revenues of almost $1 trillion. However, expenses will also be at a record high of $936 billion. Net profit will be $30.5 billion. Unfortunately, that’s not a record and represents a net margin of just over 3 per cent.

“But considering where we were just a few years ago, it is a major achievement,” Walsh added, referring to the COVID-19 pandemic, where the industry collapsed, resulting in $140 billion in losses in 2020.

‘Back from the brink’

In Asia, IATA trebled its industry profit forecast for 2024 to $2.2 billion despite a sluggish recovery in international travel in China. IATA’s next AGM will take place in Delhi, India, with budget carrier Indigo Airlines being the next host airline.

“We deserve to celebrate the hard work that has brought our industry back from the brink while acknowledging that we remain squeezed between a fiercely competitive environment downstream and the upstream supply chain’s lack of competition,” said Walsh, referring to the constraints plaguing jet manufacturers and resulting in severe delays for aircraft deliveries.

“The best thing that I can say about the supply chain exasperations of the last year is that they appear to have not gotten worse.”

IATA has more than 300 members, accounting for over 80 per cent of global air traffic. According to Walsh, global airlines will deliver 62 million tonnes of cargo, making $8.3 trillion in trade possible.

Abdullah bin Touq Al Marri, Minister of Economy was speaking at the International Air Transport Association (IATA) annual meeting and world travel summit being held in Dubai.

‘Good value for money’

Walsh also said that ‘flying remains good value for money’. “About 77 per cent of the 6,500 travellers we recently polled in 15 markets said as much. That’s not surprising considering that the real cost of air travel has fallen 34 per cent over the last decade.”

However, for all the value airlines create, they can only retain $6.14 profit per passenger, explained Walsh.

“To translate into the coffee benchmark that has become an AGM tradition, that buys one single espresso in this (Dubai) hotel's coffee shop,” he said. “I don’t begrudge their profits. But governments who love to look to our industry for new tax revenues need to understand that our margins are thin, and we rarely earn our cost of capital,” he said.

He said that this year airlines would earn a 5.7 per cent return on invested capital, which is well below the average 9 per cent cost of capital.

Walsh also said plenty is standing in the way of sustainable industry-level profits. “We can do it. Overcoming these issues to achieve sustainable profitability is critical. That will enable airlines to invest fully in the products our customers want and the tools to get us to Net Zero carbon emissions by 2050,” he added.

“It will also enable us to expand connectivity—and its economic and social benefits—to waiting people and economies,” he said.