Airlines expect to carry 4,7 billion passengers next year, a historic record dixit the International Air Transport Association (IATA). According to the umbrella organization, the airline industry will also post a net profit of 25,7 billion dollars in 2024, a slight improvement on the 23,3 billion dollars the industry is most likely to post this year.

The rosy figures and outlook further confirm that airlines worldwide have recovered from the impact of the Covid-19 health crisis and that people love to travel despite the climate crisis.

Rosy future

For 2023, it is expected that there will be 4,29 billion passengers, down slightly from the 4,35 billion that IATA had predicted at the previous forecast in June. This does not surpass the record 4,54 billion passengers in pre-corona year 2019, but according to IATA’s forecast, it will be broken next year.

The industry revenues are also expected to reach a historic high of 964 billion dollars in 2024, compared with an estimated 896 billion dollars for 2023 and 838 billion in 2019. Consequently, the number of flights is also on the rise, with 40,1 million flights expected to occur next year, exceeding the 2019 level of 38,9 million and up from the 36,8 million flights expected this year.

However, those whooping figures do not apply to every region. Airlines in America, the EU, and the Middle East will remain profitable next year, just like those in Asia-Pacific. On the other hand, just like in 2023, African or South American carriers will not emerge from the red.

As a reminder, airlines suffered cumulative losses of 183 billion dollars between 2022 and 2022 due to the pandemic, and it was one of the hardest hit sectors.

Extraordinary recovery, but…

“Given the massive losses of recent years, the profits expected in 2024 illustrate the resilience of the aviation sector,” said Willie Walsh, IATA’s Director General, at a press conference at his organization’s headquarters in Geneva. And even though Walsh calls the speed of the recovery extraordinary, he also comments that it “seems that the pandemic has cost aviation about four years of growth”.

Still, according to Walsh, the profitability of air travel also remains low compared to other sectors, with an average profit per passenger of only 5,45 dollars. “That’s about enough to buy a basic ‘grand latte’ at a London Starbucks,” said Walsh, who added that a net profit margin of 2,7% is far below what investors in almost any other industry would accept. “It is far too little to build a future resilient to shocks for a critical global industry on which 3,5% of GDP depends and from which 3,05 million people directly earn their livelihoods.”

That low net profit margin is also mainly due to high fuel prices. In 2024, the kerosene bill is expected to reach 281 billion dollars, which represents 31% of operating expenses, compared to 271 billion dollars for 2023, or 32% of expenses – if a barrel of kerosine still costs 79,7 dollars in 2019, this year it will be 115,5 dollars or an increase of almost 45%.

Those higher costs were partly absorbed by higher ticket prices, also because travel demand exceeded airline capacity in 2023, which is still constrained by delayed aircraft deliveries and other operational problems. At the same time, seat occupancy returned to pre-crisis levels.

On the other hand, air cargo transport, an oxygen balloon for companies at the height of the health crisis, saw its profitably erode. Its turnover should reach 111 billion dollars in 2024, compared to 210 billion dollars in 2021, which is still higher than the 101 billion dollars in 2019.

CO2 emissions also up

Of course, the rising number of flights and passengers also increases fuel consumption and consequently CO2 emissions. According to projections revealed at the COP 28 climate summit, airlines expect to consume 374 billion liters of fuel in 2024, which will release 939 million tons of CO2 into the atmosphere (compared to almost 800 million tons in 2022, about 80% of the pre-pandemic level.

Air transport emits less than 3% of global CO2. Still, it is being blamed because it only serves a small minority of people, and its effects on warming are likely greater because it also produces nitrogen oxides and condensation trails.

The aviation industry is committed to “net zero emissions” of CO2 by 2050. For that, it counts in particular on increasing the use of non-fossil fuels or Sustainable Aviation Fuels. But SAF will still represent only 0,53% of total global commercial air transport fuel consumption in 2024, compared to an estimated 0,2% this year.