“Historic record” in sight: airlines expect to transport 4.7 billion passengers around the world next year, more than before the health crisis.
By this year, carriers will have erased the effects of COVID-19 from their accounts, returning to the green with cumulative net profits of $23.3 billion, according to the International Air Transport Association (IATA), which thus more than doubled its previous projections of 9.8 billion, published last June.
The organization forecast 4.29 billion air trips this year, a slight downward revision from the 4.35 forecast in June. The record dates from 2019, at 4.54 billion.
For 2024, profits should “largely stabilize” at $25.7 billion, according to IATA, on an unprecedented global turnover of $964 billion, compared to $896 billion estimated for 2023 and $838 billion. 2019.
The landscape will be contrasted depending on the region of the globe: American, European and Middle Eastern companies will still be profitable next year, just like those in Asia-Pacific, which will still be in deficit in 2023, IATA predicts. On the other hand, the association does not see African or South American carriers emerging from the red in 2024.
One of the economic sectors most affected by the health crisis, due to border closures and other travel restrictions, airlines have suffered cumulative losses of $183 billion between 2020 and 2022.
“Given the massive losses of recent years”, the profits expected in 2024 “illustrate the resilience of the aviation sector”, underlined IATA Director General Willie Walsh, welcoming the “extraordinary pace of recovery”.
Nevertheless, “it seems that the pandemic has cost the sector four years of growth,” noted Mr. Walsh during a “press day” at his organization’s headquarters in Geneva (Switzerland).
Standardization
“From 2024 onwards, forecasts show that we can expect more normal growth trajectories for both passengers and freight,” according to the CEO.
Air cargo transport – a lifeline for companies at the height of the health crisis, when almost two thirds of their 2019 passengers had evaporated – saw its profitability erode. Its turnover should reach 111 billion dollars in 2024, compared to 210 in 2021. But it would remain higher than the 101 billion in 2019.
On the passenger side, the strong recovery in 2023 has resulted in high ticket prices as travel demand outstrips airline capacity constrained by delayed aircraft deliveries and other operational difficulties.
Without looking back, this trend seems likely to slow down in 2024, according to IATA. At the same time, aircraft occupancy rates have returned to their pre-crisis level. However, the profitability of air travel remains low compared to other sectors, according to Walsh, with an average profit per passenger of just $5.45.
Company costs will continue to be inflated by the price of fuel: in 2024, the kerosene bill is expected to reach $281 billion, which represents 31% of operating expenses, compared to the $271 billion projected for 2023, or 32% of expenses.
The IATA scenario is based on a price of 113.8 dollars per barrel of kerosene in 2024, compared to 115.5 in 2023. It was 79.7 dollars in 2019.
According to these projections revealed at the COP28 climate summit, companies expect to consume 374 billion liters of fuel in 2024, which will release 939 million tonnes of CO2 in the air.
Air transport emits less than 3% of CO2 worldwide, but is singled out because it only serves a small minority of people. Its effects on warming are likely greater because it also produces nitrogen oxides and condensation trails.
The sector has committed to “net zero” CO emissions2 by 2050 and focuses in particular on increasing and massive production of fuels of non-fossil origin (sustainable aviation fuel, SAF in English).
But SAF will still account for just 0.53% of total global commercial air transport fuel consumption in 2024, compared to an estimated 0.2% this year, according to IATA.