International airline body IATA said airlines are now likely to make almost $5bn more net profit in 2024 than originally expected, and $3bn more than last year.
However, IATA said the return on invested capital for airlines will only reach 5.7%, which is about 3.4 percentage points below the cost of capital.
The body, which represents most international airlines, said average air fares were still ‘significantly below 2019 ‘when measured in constant 2018 dollars’.
It said the ‘real average’ return fare this year is expected to be $252 compared to $306 in 2019.
“This continues the trend of ever-increasing affordability for air travel, even if the figures are somewhat skewed by shorter journey distances in 2024 due to the slower pace of recovery in some long-haul markets,” said IATA Director General Willie Walsh.
“In line with this, IATA’s April 2024 polling data revealed that 77% of respondents agree that air travel is good value for money.”
He described the expected aggregate net profit of $30.5bn in 2024 as ‘a great achievement considering the recent deep pandemic losses’.
“With a record five billion air travelers expected in 2024, the human need to fly has never been stronger,” he added.
“Without a doubt, aviation is vital to the ambitions and prosperity of individuals and economies. 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.”
IATA says its projections for a tripling of Sustainable Aviation Fuels (SAF) production this year is on track, but this will still only account for 0.53% of total fuel used in 2024.
“The interest in SAF is growing and there is plenty of potential. But the concrete plans that we have seen so far are far from sufficient,” said Willie.
“Governments have set clear expectations for aviation to achieve a 5% CO2 emissions reduction through SAF by 2030 and to be net zero carbon emissions by 2050. They now need to implement policies to ensure that airlines can actually purchase SAF in the required quantities.”
Meanwhile, IATA has announced that it will set up a SAF Registry to report emissions reductions from sustainable fuel.
Seventeen airlines, one airline group, six national authorities, three equipment manufacturers, and one fuel producer are supporting the effort to develop the registry, which is expected to launch in the first quarter of 2025.
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However, IATA said the return on invested capital for airlines will only reach 5.7%, which is about 3.4 percentage points below the cost of capital.
The body, which represents most international airlines, said average air fares were still ‘significantly below 2019 ‘when measured in constant 2018 dollars’.
It said the ‘real average’ return fare this year is expected to be $252 compared to $306 in 2019.
“This continues the trend of ever-increasing affordability for air travel, even if the figures are somewhat skewed by shorter journey distances in 2024 due to the slower pace of recovery in some long-haul markets,” said IATA Director General Willie Walsh.
“In line with this, IATA’s April 2024 polling data revealed that 77% of respondents agree that air travel is good value for money.”
He described the expected aggregate net profit of $30.5bn in 2024 as ‘a great achievement considering the recent deep pandemic losses’.
“With a record five billion air travelers expected in 2024, the human need to fly has never been stronger,” he added.
“Without a doubt, aviation is vital to the ambitions and prosperity of individuals and economies. 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.”
IATA says its projections for a tripling of Sustainable Aviation Fuels (SAF) production this year is on track, but this will still only account for 0.53% of total fuel used in 2024.
“The interest in SAF is growing and there is plenty of potential. But the concrete plans that we have seen so far are far from sufficient,” said Willie.
“Governments have set clear expectations for aviation to achieve a 5% CO2 emissions reduction through SAF by 2030 and to be net zero carbon emissions by 2050. They now need to implement policies to ensure that airlines can actually purchase SAF in the required quantities.”
Meanwhile, IATA has announced that it will set up a SAF Registry to report emissions reductions from sustainable fuel.
Seventeen airlines, one airline group, six national authorities, three equipment manufacturers, and one fuel producer are supporting the effort to develop the registry, which is expected to launch in the first quarter of 2025.
The post Travel boom prompts airlines to raise profit forecast appeared first on Travel Gossip.
Continue reading...
