by Joanna Plucinska
GENEVA, Dec 6 (Reuters) – Airline profits are expected to stabilize in 2024 as confirmation of post-pandemic air travel growth is offset by high costs of capital and capacity constraints, the Association said on Wednesday of international air transport (Iata).
The global air transport sector has largely recovered from the COVID-19 pandemic which brought activity to a standstill, thanks in particular to the explosion in demand in North America, the Middle East and in Europe.
The air transport sector returned to profitability in 2023, with net profit expected at 23.3 billion dollars (25.13 billion euros) with a margin of 2.6%, and should reach 25.7 billion dollars and a margin of 2.7% next year, Iata predicts.
If the turnover is expected to reach the record sum of 964 billion dollars, the increase in the cost of capital caused by the increase in interest rates is likely to fuel the sector’s concerns, warns the air transport lobby.
“The industry’s profits need to be put into perspective,” said Willie Walsh, director of Iata.
“On average, airlines only keep $5.45 for each passenger carried.”
The number of travelers carried around the world is expected to reach historic levels, with 4.7 billion people expected in 2024, compared to 4.5 billion in 2019.
Geopolitical instability, notably the war between Israel and Hamas and the conflict in Ukraine, could have a negative impact on the sector, warned Iata, which fears that it will lead to a rise in oil prices. (Joanna Plucinska; French version Nicolas Delame, edited by Blandine Hénault)
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