According to IATA data, the airline industry will continue its profitability this year, with the number of passengers traveling by air reaching approximately 5 billion. Thanks to the increase in passenger demand observed in all regions of the world, the aviation industry’s revenues will reach about $1 trillion this year. The European region, which includes Turkish Airlines (THY), also shows a positive outlook.
The International Air Transport Association (IATA), an organization representing over 330 airlines and 80% of global air traffic, has painted an optimistic picture for the industry for 2024 and 2025. According to IATA data, the number of passengers traveling by air this year will reach approximately 5 billion, boosting aviation industry revenues to $1 trillion.
Supply Chain Issues
IATA noted that supply chain issues continue to affect global trade and companies, highlighting that unforeseen maintenance problems with certain types of aircraft and engines, as well as delays in aircraft spare parts and deliveries, are limiting capacity expansion. Data released at the IATA Annual Meeting in Dubai predict that global net profit will reach $30.5 billion in 2024.
Regional Profitability and Demand Increase
North America and the Asia-Pacific regions continue to drive momentum in the aviation sector. A significant increase is expected in the Asia-Pacific region, particularly led by the Chinese market, while the North American region continues to contribute the most to the profitability of the aviation industry. The European market, which includes THY, also presents a positive outlook for 2024 with strong demand expectations.
IATA Director General Willie Walsh stated that airline companies have managed to increase their profitability in a world full of uncertainties, emphasizing that the expected net profit of $30.5 billion in 2024 is a significant achievement post-pandemic. Walsh highlighted that resolving supply chain issues is critical for enhancing aviation sustainability and competitiveness.
Increase in Passenger Revenues
According to IATA data, passenger revenues are expected to reach $744 billion in 2024. Passenger demand (RPK) is projected to increase by 11.6% annually. The average round-trip airfare, which was $306 in 2019, is expected to drop to $252 in 2024. The average passenger load factor is anticipated to be 82.5%.
Fuel and Labor Costs
The price of oil per barrel is calculated to average $113.8 in 2024, with fuel costs expected to rise to $291 billion, accounting for 31% of total expenses. Labor costs are expected to increase by 7.6%, reaching $214 billion.
Decline in Cargo Revenues
While passenger demand in aviation is expected to increase significantly, cargo revenues are projected to decrease to $120 billion in 2024. After peaking during the pandemic in 2021, cargo revenues will normalize in 2024.
Sustainable Aviation Fuel (SAF)
The production of Sustainable Aviation Fuel (SAF) is expected to triple to 1.9 billion liters in 2024. However, SAF will only be able to meet 0.53% of aviation’s fuel needs in 2024. IATA Director General Walsh stated that the increase in SAF production is encouraging but emphasized the need for more concrete plans.
The airline industry will continue to grow in 2024 and will keep taking necessary steps to tackle new challenges.
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