KUALA LUMPUR: The International Air Transport Association (IATA) has forecasted that the global airline industry will see revenue soaring close to RM4.7 trillion (US$1 trillion).
Their net profits are expected to reach RM143.6 billion (US$30.5 billion) with a record high of nearly five billion air travel passengers in 2024.
The trade body's director general Willie Walsh said the 2024 net profits estimation would see an improvement from 2023 net profits which are projected to be RM129 billion (US$27.4 billion).
"In a world of many and growing uncertainties, airlines continue to shore-up their profitability. The expected aggregate net profit of US$30.5 billion in 2024 is a great achievement considering the recent deep pandemic losses."
"With a record five billion air travellers expected in 2024, the human need to fly has never been stronger. 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," Walsh said at the 80th IATA annual general meeting (AGM) and World Air Transport Summit 2024 in Dubai.
He also said resolving supply chain issues is critical for the airline industry so that fleets could be deployed efficiently to meet the rising air travel demand.
Walsh added that an emphasis on public policy measures that drive business competitiveness in the industry would be a win for the economy, jobs and connectivity as well as relief from onerous regulation and increasing tax proposals.
Passenger revenues in 2024 are expected to rise 15.2 per cent to RM3.5 trillion (US$744 billion) from RM3 trillion (US$646 billion) in 2023 while revenue passenger kilometres (RPK) would see an 11.6 per year growth year-on-year.
IATA forecasted that the real average return airfare in 2024 is expected to be US$252 less than US$306 of 2019, which shows the rising affordability for air travel.
On air cargo, Walsh said RM39 trillion (US$8.3 trillion) worth of cargo would be delivered globally although cargo revenues would fall to RM565 billion (US$120 billion) in 2024 from RM649 billion (US$138 billion) in 2023.
"Despite the strength of demand, cargo yields are expected to fall 17.5 per cent in 2024 while remaining slightly above 2019 levels. This is a normalisation after extraordinary pandemic highs. A key factor in this is the significant belly capacity that entered the market in 2023 in tandem with the recovery of passenger travel."
"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," Walsh said.
Airlines would also see higher expenses in 2024 at US$936 billion despite forecasted total revenues of US$996 billion with jet fuel likely would average US$113.8 per barrel making the total fuel bill of US$291 billion, accounting for 31 per cent of all operating costs.
2024 will also see 38.7 million flights to be available, which is 1.4 million flights below previous estimates in Dec 2023, due to the slowing pace of aircraft deliveries resulting from continuous supply chain issues in the aerospace sector.
IATA said 2024 would see 1583 aircraft delivered, 11 per cent less than the expectation of 1777 aircraft projected a few months ago to join the global fleet in 2024.
Walsh said the airline industry's profitability is fragile and could be affected by several factors namely the war that could negatively shift the economic outlook and supply chains involving maintenance issues on some aircraft, engine types and late delivery of aircraft and aircraft parts.
He added that airlines could also face rising costs of compliance and additional costs on passenger rights regimes, regional environmental initiatives and accessibility requirements as well as public policy that could be detrimental to the industry.
IATA also announced that India's InterGlobe Aviation Limited or better known as IndiGo will host the 81st IATA AGM and World Air Transport Summit in Delhi in 2025.
Walsh said India is on the path to become the world's third largest aviation market within the decade with record aircraft orders, impressive growth and world-class infrastructure developments.
"With such bright prospects, it's the perfect time for the IATA AGM to return to India and witness these exciting developments first hand," he added.