Middle Eastern carriers are poised for a robust financial performance, with the International Air Transport Association (IATA) projecting a combined net profit of $3.1 billion in 2024.

This forecast reflects a 4.8% increase from the estimated figures for 2023, indicating a positive trajectory for the region’s aviation sector.

The IATA emphasized the Middle East’s resilience and agility in rebuilding international networks and reestablishing super-connector hubs. Swift actions in these areas are expected to contribute to a faster growth rate in capacity compared to demand in 2024.

Despite this, the implementation of more efficient fleets is anticipated to result in a potential slight increase in net profit margin.

Projections for the Middle East indicate a 6.3% rise in Revenue Passenger Kilometres (RPK) in 2024 compared to the previous year, coupled with a substantial 10.7% increase in Available Seat Kilometres.

These figures underline the region’s commitment to expanding its aviation capabilities and meeting the growing demand for air travel.

On a global scale, the IATA anticipates a historic high in air travel, with approximately 4.7 billion people expected to travel in 2024.

This surpasses the pre-pandemic level of 4.5 billion recorded in 2019, marking a significant milestone in the industry’s recovery.

The broader airline industry is expected to see net profits reach $25.7 billion in 2024, boasting a 2.7% net profit margin.

This represents a modest improvement over the estimated $23.3 billion net profit in 2023, which carried a 2.6% net profit margin. Operating profits are also set to rise from $40.7 billion in 2023 to $49.3 billion in 2024, highlighting the industry’s financial rebound.

Total revenues for the airline industry in 2024 are projected to grow by 7.6% year over year, reaching a record $964 billion.

This upswing is expected to outpace expense growth, which is forecasted at 6.9%, totaling $914 billion.

The IATA underscores the remarkable recovery but emphasizes the challenges, stating that a net profit margin of 2.7% remains below what investors in most industries would accept.

Willie Walsh, Director General of IATA, acknowledges the impressive speed of the aviation industry’s recovery while highlighting the substantial impact of the pandemic, estimating a setback equivalent to four years of growth.

He emphasizes the need to view industry profits in the context of ongoing challenges such as regulatory burdens, fragmentation, high infrastructure costs, and a supply chain dominated by oligopolies.

Looking ahead, the IATA envisions a future where industry revenues outpace expenses, strengthening overall profitability.

A record-high 40.1 million flights are expected in 2024, surpassing the 2019 level and showing an upward trajectory from the 36.8 million flights anticipated in 2023.

Surveying passenger sentiments, the IATA finds that 44% of respondents plan to travel more in the next 12 months than in the previous year, highlighting a positive consumer outlook.

Only 7% express intent to travel less, with 48% anticipating maintaining similar travel levels in the coming year, indicating sustained confidence in air travel.

 

 

Last Updated: 07 December 2023