Geneva (TIP) – The airline industry is projected to post a net profit of USD 25.7 billion and revenue at a historic high of USD 964 billion in 2024 as more normal growth is expected in both passenger and cargo segments, global grouping IATA said on Wednesday. For 2023, the net profit is estimated at USD 23.3 billion, significantly higher than the USD 9.8 billion projected by the International Air Transport Association (IATA) in June this year. Briefing reporters here, IATA Director General Willie Walsh said India is a “hugely exciting market” and that he was very optimistic. He was responding to a query related to India — one of the world’s fastest growing civil aviation markets. IATA is a grouping of more than 300 airlines.
It said industry revenues are expected to touch a historic high of USD 964 billion next year.
“An inventory of 40.1 million flights is expected to be available in 2024, exceeding the 2019 level of 38.9 million and up from the 36.8 million flights expected in 2023,” it noted.
The airline industry’s operating profit is expected to touch USD 49.3 billion in 2024 from USD 40.7 billion this year. “Some 4.7 billion people are expected to travel in 2024, a historic high that exceeds the pre-pandemic level of 4.5 billion recorded in 2019,” IATA said.
Industry passenger load factor is nearing its 2019 level, which is supporting the financial recovery of the airlines, IATA Director Policy and Economics Andrew Matters said.
“The airline industry net profit is expected to reach USD 25.7 billion in 2024 (2.7 per cent net profit margin). That will be a slight improvement over 2023, which is expected to show a USD 23.3 billion net profit (2.6 per cent net profit margin),” IATA said, while releasing its review of 2023 and the outlook for 2024 here. The industry is estimated to have a total fuel bill of USD 281 billion, accounting for 31 per cent of all operating costs, next year as the fuel price is expected to average USD 113.8 per barrel. “Airlines are expected to consume 99 billion gallons of fuel in 2024,” IATA said. Next year, the total expenses are estimated to rise to USD 914 billion. As per the grouping, high demand for travel coupled with limited capacity due to persistent supply chain issues continues to create supply and demand conditions supporting yield growth.”Passenger yields in 2024 are expected to improve by 1.8 per cent compared to 2023,” it added. The cargo volume is expected to be higher at 61 million tonnes next year compared to 58 million tonnes in 2023.
“From 2024, the outlook indicates that we can expect more normal growth patterns for both passenger and cargo… while the recovery is impressive, a net profit margin of 2.7 per cent is far below what investors in almost any other industry would accept,” Walsh said.
According to him, the airlines will always compete ferociously for their customers but they remain far too burdened by onerous regulation, fragmentation, high infrastructure costs, and a supply chain populated with oligopolies. About the Asia Pacific market, IATA said while some of the region’s main domestic markets — China, Australia and India — recovered quickly from the pandemic, international travel to/ from the region was subdued as China only eliminated the last of its international travel restrictions in mid-2023. The Asia Pacific region is expected to report a net loss of USD 0.1 billion in 2023 and have a net profit of USD 1.1 billion in 2024. Source: PTI
Tag: IATA
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Airline industry to rake in $25.7 bn profit in 2024 India a hugely exciting market: IATA
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Foreign tourist arrivals will not revive before 2023: Report
New Delhi (TIP): Foreign tourist arrivals in India will not touch pre-Covid-19 pandemic levels before 2023, the Centre for Asia Pacific Aviation (CAPA) has said, citing the International Air Transport Association’s (IATA) March survey that found 80% of visitors do not want to travel due to quarantine rules.
CAPA’s preliminary forecast indicates that foreign arrivals will grow to just over 18 million by 2030. It said India is highly dependent on long-haul flights for foreign tourist arrivals. CAPA said such flights are expected to recover more slowly than short-and medium-haul travel. It has estimated 72.0% of people will travel by air for visiting friends and relatives as soon as the pandemic has been contained. CAPA said Covid-19 has peaked in the UK, US, Canada, China, Malaysia, Australia, which are key sources of foreign tourists to India. It added Covid-19 vaccination rollouts are in initial stages worldwide, except the UK (34.3%) and the US (19.7%). Widespread vaccinations are expected by late 2021 in other countries from where a bulk of tourists come to India, it said.
The IATA survey found 56% of potential travellers will postpone their air travel until the economy stabilises, 66% of them feel that quarantine is not necessary for vaccinated passengers and 81% were ready to travel by air if vaccinated. The survey also found 84% of potential tourists will not travel if there is a chance of quarantine.
“The aviation and tourism industries should ensure the highest levels of strategic determination, commitment and coordination to expedite the recovery of India’s inbound tourism,” CAPA said in its report. “Although some travel may resume from winter 2021/22, meaningful recovery is unlikely until winter 2022-23 and pre-Covid volumes will probably not be achieved until winter 2023-24.” It added India is a long-haul destination from most of its source markets and a large proportion of travellers are from vulnerable older age groups. “[This] will impact the speed of recovery. Protocols related to health and hygiene, and the quality of civil infrastructure will become the new normal and the industry needs to prepare for this reality.” Aviation safety consultant Mohan Ranganathan said foreign tourist arrivals will not revive before 2025. “Tourist’s traffic will not commence even after the vaccinations are completed until restrictions imposed by the government are lifted,” he said. Source: HT