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20-YEAR AIR PASSENGER FORECAST

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IATA /ACI offer positive air transport forecasts, but concerns emerge about extended WHO powers

IATA and ACI have both formally reported recovery in passenger numbers in 2022, averaging 70% of 2019 volumes compared to 42% in the previous year - although large-scale regional discrepancies remain. North American airlines have led the recovery and seem set to continue to do so.

IATA expects industry-wide passenger traffic to recover to 2019 levels in 2024, then grow at an average rate of approximately 3% per annum over its forecast horizon. ACI broadly concurs.

During the COVID-19 pandemic CAPA commented on a seeming lack of coordination between global health and transport authorities, with individual governments often left to negotiate and agree between themselves on whether or not citizens would be permitted to travel, and under what circumstances.

This undoubtedly delayed the recovery, and then the industry was swamped by a sudden relaxation of restrictions for which it was unprepared. A huge improvement in that coordination is required before the next pandemic or other black swan event arrives.

But at the same time there must be deep concern at the attempt by the WHO to take control of the issuing of digital passports globally from national governments, together with the authority to otherwise halt international travel for those that do not have them - even on the basis of a potential health emergency.

• Passenger traffic recovered from 41.7% of 2019 volumes in 2021 to 68.5% ( IATA )/72% ( ACI ) in 2022.
• Global passenger traffic is forecast to reach 8.4 billion passengers, or 92% of 2019 levels, in 2023 ( ACI ).
• North American airlines have led the industry recovery.
• International traffic increased significantly wherever travel restrictions were lifted, and that supports a positive outlook for (previously slow-to-recover) Asia Pacific .
• O-D passenger traffic increased 31.6% year-on-year during 2022, but since Jul-2022 it has "mostly trended sideways" compared to 2019 levels.
• IATA 's Global Air Connectivity Index recovered to 74% of pre-pandemic levels for international connectivity and 87% for domestic connectivity, as of Dec-2022.
• International ticket sales gradually caught up to domestic sales in 2022.
• Most air ticket sales are for travel in the near future, as passengers still perceive some degree of uncertainty.
• IATA expects industry-wide passenger traffic to recover to 2019 levels in 2024, then grow at an average rate of approximately 3% per annum over its forecast horizon.
• The recovery and near term growth of passenger traffic will vary across regions, with North America leading the way.
• There is uncertainty about whether primary or secondary level airports will benefit the most, 'post-COVID'.
• What value do forecasts 20 years into the future have today?
• Concerns grow about a potential power grab by WHO that would dictate the imposition of global vaccine passports.

The Three Amigos. Not.

The two organisations might be literally next door to each other in Montreal 's prestigious Victoria Square, but it is rare, to say the least, that the International Air Transport Association ( IATA ) and Airports Council International ( ACI ) are found "singing from the same hymn sheet". At times there might be a Green Line between them, manned by blue-helmeted UN troops.

It is particularly gratifying that they are now doing precisely that, since the air transport business seems at last to be putting the massive disruption of the COVID-19 pandemic behind it.

Just when it will be safe to declare it all over, and come out from behind the sofa, rests of course with the World Health Organization (WHO), which has it in its powers to reduce COVID-19 from pandemic to endemic status but is reluctant to do that just yet.

When the United Nations agency does so it will be the moment for another one, the International Civil Aviation Organization ( ICAO ), which is based - you guessed it - in an office block right across the road from IATA and ACI , to step up to the plate, to investigate and acknowledge what it did right and wrong, especially during the early months of the pandemic; and especially the 'wrong' parts.

Montreal is to Air Transport what Rome, Mecca, Varanasi and Amritsar are to religion; as Washington is to political power; and as Paris is to romance. Montreal is the home, in this instance, to a tripartite power base that - if it hasn't done so already - must strive to ensure that the global air transport industry is never again blindsided by an obscure pneumonia, reputedly arising out of an anonymous Chinese city.

Far better liaison will be needed from the get-go if COVID is ever repeated

And just as individual countries across the world are beginning their own investigations into how they handled or mishandled COVID, promising as ever that "lessons will be learned" (and often seeking to apportion blame rather than derive accurate information on which to base future strategies), Montreal collectively must seek to work closely and authoritatively with the WHO to make sure there is far better coordination of responses between governments and operators.

In particular, better coordination of the enforcing and lifting of travel bans, compared to what CAPA often described in 2021 as a "chaotic" lack of strategy.

Concerns grow about extended vaccine/passport powers sought by WHO

It must be of concern to airlines and airports alike that the WHO is seeking - and will probably soon get - powers to control the global response to future pandemics that will be above those of independent nations.

Moreover, it is pushing for global vaccine passports, digital certificates and other health-related documents to be adopted under its own auspices when it declares "potential or actual" health emergencies. That may be ratified as soon as May-2024.

Thus, the decision as to whether an individual can travel from their own country to a foreign one anywhere in the world would be at the whim of an unelected body in New York, rather than with nationally elected governments.

If an outbreak of Ebola in West Africa resulted in a single case on another continent, that could (in theory, at least) lead to air travel being available only to those that have been vaccinated against that disease, and that imposition would probably remain even after the outbreak was over.

Indeed, it could mean the imposition of such vaccination mandates simply on the grounds of a "potential" emergency, without transmission being detected away from the original source.

If the representative bodies for airlines and airports are not concerned about this development and are not lobbying governments about it right now - in a coordinated response - then it has to be asked: why not?

That light at the end of the tunnel is growing brighter; there's a stronger willingness to fly, but bookings still left until late in the day

But for now, the air transport business will be grateful to see the light at the end of the tunnel growing brighter with every passing day.

Turning first to IATA 's 4Q2022 report, which was published in Feb-2023, the key takeaways are: passengers demonstrating a stronger willingness to fly, but waiting until nearer the travel date to book owing to continuing uncertainty; North America leading the recovery and reaching 2019 traffic levels in 2023, at least a year earlier than the rest of the world; and Asia Pacific taking the longest to recover (2025).

IATA , in its Quarterly Air Transport Chartbook for 4Q2022, reported the following passenger traffic highlights:

• Industry -wide traffic in Revenue Passenger Kilometres (RPKs) continued its steady recovery in Dec-2022 and for the full year 2022. Global air travel gained momentum and recovered substantially as travel restrictions were removed and passengers expressed a strong willingness to fly. Traffic recovered from 41.7% of 2019 volumes in 2021 to 68.5% in 2022;
• North American airlines led the industry recovery, followed by Latin American and European airlines;
• Routes between Europe and various regions recovered swiftly in 2022, driven by pent-up demand and the reopening of air travel markets. Traffic on routes connecting various regions to Asia were the slowest to recover due to travel restrictions;
• International traffic increased significantly wherever travel restrictions were lifted. The recent relaxations of China 's zero-COVID policies and the reopening of air travel markets support a positive outlook for Asia Pacific ;
• Global origin-destination (O-D) passenger traffic increased to 75% of pre-pandemic levels in Jul-2022. O-D passenger traffic increased 31.6% year-on-year during 2022, but has "mostly trended sideways" compared to 2019 levels since Jul-2022;
• IATA 's Global Air Connectivity Index recovered to 74% of pre-pandemic levels for international connectivity and 87% for domestic connectivity as of Dec-2022. The number of domestic airport pairs served returned to pre-pandemic levels, but only 85% of international airport pairs have been restored. The recovery in international flight frequency lags further behind at 77% of pre-pandemic levels. International connectivity recovery reached 102% in Latin America and the Caribbean , 84% in North America , 82% in Europe and 52% in Asia Pacific ;
• International ticket sales gradually caught up to domestic sales in 2022, due to positive developments in international travel demand and the easing of travel restrictions in China . International ticket sales improved in Jul-2022, despite high energy prices, traffic disruptions and other economic headwinds. The latest trends in domestic and international ticket sales indicate sustained activity levels over the northern winter period;
• Most air ticket sales are for travel in the near future, as passengers still perceive some degree of uncertainty when making travel arrangements. 88% of tickets sold in 4Q2022 were for travel within four months, and 12% were for periods beyond four months from the purchase date;
• IATA expects industry-wide passenger traffic to recover to 2019 levels in 2024, then grow at an average rate of approximately 3% p/a over its forecast horizon. Forecast risks are skewed to the downside due to various headwinds in the near term, including a prolonged war in Europe , high jet fuel prices, elevated general price levels, and slowing growth in the global economy;
• IATA expects the recovery and near term growth of passenger traffic will vary across regions. North America traffic is forecast to recover to 2019 levels in 2023, followed by Latin America , the Middle East and Europe in 2024, and by Africa and Asia Pacific in 2025.

ACI 's forecasts overlook socio-political and socio-economic trends which spurn the very concept of air travel

IATA has focused on the here, now and near future in its report. ACI does the same but also projects forward as far as 2041.

In the light of events in the first three years of the 2020s - a decade that may turn out to be as blighted as were the periods 1915-1925 and 1935-1945 - with the threat of globally transmitted diseases lingering, along with wars and conflict actual and anticipated, and technology progressing at an exponential rate, it could reasonably be asked: what is the point of extrapolating air travel almost 20 years into the future anyway?

ACI says its data set presents 20-year traffic forecast figures, providing airport planners and investors with "reliable data", but how can such data really be reliable today?

At least, if the status quo is somehow miraculously retained ACI has good news for those who work in the business

ACI World , in its 2022 and short term outlook, reported, like IATA , an upsurge in air travel demand across many markets amid heightened macroeconomic risks.

Highlights include:

• Global passenger traffic was 6.5 billion passengers in 2022, reaching 72% of 2019 levels;
• International passenger numbers were at 60% of 2019 levels and domestic reached 79%;
• Recovery in passenger volumes remained uneven across the globe, with Latin American - Caribbean markets reaching 91% of 2019 levels, whereas the Asia Pacific region lagged at 52%;
• Global passenger traffic is forecast to reach 8.4 billion passengers, or 92% of 2019 levels, in 2023. Baseline projections indicate the industry will recover to 2019 levels by 2024, driven mainly by domestic travel.

The 'opening up' of China could be a false dawn, and a 'strong labour market' means little when workers seek food charity

ACI World Director General Luis Felipe de Oliveira said, "86% of [survey] respondents plan to travel by air in 2023 - this is the highest intention to travel score since the beginning of the pandemic".

Mr Oliveira added, "The possible slowing in GDP growth in major economies[,] coupled with the rise in airfares due to higher jet fuel prices[,] weigh negatively on demand. On the other hand, a strong labour market and the re-opening of China , the second largest aviation market after the United States , represent an important boost to global passenger traffic".

So it is fair to say that both IATA and ACI are confident about the immediate prospects for the business, irrespective of economic downturns, inflation (which is stabilising, or at least not getting any worse in many countries), and military conflict.

At the same time it seems a little strange to talk about a strong labour market when leisure air travel is dictated by factors such as real income elasticity of demand, i.e. how much disposable income remains after the bills have been paid (and for many there is not much of that). Not by how much one earns.

Equally, is it not somewhat naïve to talk about 'the re-opening of China ' when the proven provision of arms to Russia by China in order to perpetuate the Ukraine War would probably ensure massive economic retaliation by the nations of the West, not to mention the continuing potential for China to invade Taiwan ?

Nevertheless, it is perfectly reasonable for ACI to assume that none of this will happen, that the Ukraine conflict will soon be resolved (and ACI admits it probably won't), that COVID will quickly fade into history as its symptoms become those of a light cold, that inflation will reduce to normal, that there will be no more black swans, (that the aliens won't invade…and that pigs might fly!).

In that case the world can anticipate, in the period 2023-2041:

• Passenger traffic worldwide is expected to reach 19.3 billion in 2041;
• Airports are predicted to handle almost 200 million tonnes of air cargo worldwide. The US and China will remain the two largest markets, accounting for 40% of global cargo;
• Airports worldwide will handle 153.8 million aircraft movements. The US , China and India are predicted to be the leading markets for aircraft movements in 2041.

Will bigger or smaller airports win in the future?

There is an intriguing dichotomy between a previous statement from IATA , which dates to Nov-2022 and which concerns European preferences, and a recent statement by an American Airlines executive, speaking about US airports.

Those statements are contradictory, and indicative of the confusion which remains 'post-COVID.'

In Nov-2022 IATA reported the following results from a survey of 500 European business leaders:

• 89% believed that being close to an airport with global connections gives them a competitive advantage;
• 84% could not imagine doing business without access to air transport networks;
• 82% thought their business could not survive without connectivity to global supply chains via air transport;
• 61% rely on aviation for global connectivity either exclusively (35%) or in combination with intra- Europe travel (26%). The remainder (39%) primarily use intra-European networks. 55% reported that their offices are purposefully located within an hour of a major hub airport;
• 82% stated that air connectivity is more important than rail connectivity, with 71% reporting that the rail network is an adequate alternative for business travel and 64% saying that they would use rail more often for business travel if the costs were lower.

It would appear that in Europe the 'desire' within business circles, at least to travel through hubs rather than find and use a direct flight from a secondary airport, has returned. Undoubtedly this tendency will have been influenced by the service levels provided by alliance member airlines, both in the air and on the ground.

That state of play does seem to contrast somewhat with the position in the US , where American Airlines ' MD for Corporate Real Estate and Facilities, Katherine Goudreau, stated in Feb-2023 that passenger migration had resulted in "explosive" growth at small-to-medium sized airports (presumably for her airline), as passengers "abandon" larger cities.

Ms Goudreau noted that increased traffic may result in infrastructure issues, including parking constraints as facilities are unable to accommodate rapid growth, and she was probably speaking in general terms about 'passenger migration' from both the business and leisure segments, whereas the IATA survey was specifically of business leaders.

Nevertheless, the gulf in the philosophies is yet another mark of how hard it continues to be in such difficult times to identify accurately, and to forecast, global trends in the business.

That has ramifications for airports, airlines and tourist authorities, among many others.

There is plenty of work here for university postgraduate research degree applicants to get stuck into.

The full IATA and ACI reports can found online at CAPA's website under IATA (subsection News ) and ACI (subsection News ).

Want more analysis like this.

Economics Industry outlook upgraded to $25.7 billion profit in 2024

IATA announced strengthened profitability projections for airlines in 2023, which will then largely stabilize in 2024. However, net profitability at the global level is expected to be well below the cost of capital in both years. Very significant regional variations in financial performance remain.

Outlook highlights include:

• Airline industry net profits are expected to reach $25.7 billion in 2024 ( 2.7% net profit margin). That will be a slight improvement over 2023 which is expected to show a $23.3 billion net profit ( 2.6% net profit margin).
• In both 2023 and 2024 return on invested capital will lag the cost of capital by 4p.p., as interest rates around the world have risen in response to the sharp inflationary impulse.
• Airline industry operating profits are expected to reach $49.3 billion in 2024 from $40.7 billion in 2023.
• Total revenues in 2024 are expected to grow 7.6% year over year to a record $964 billion. Expense growth is expected to be slightly lower at 6.9% for a total of $914 billion.
• Some 4.7 billion people are expected to travel in 2024, an historic high that exceeds the pre-pandemic level of 4.5 billion recorded in 2019.
• Cargo volumes are expected to be 58 and 61 million tonnes in 2023 and 2024, respectively.

“Considering the major losses of recent years, the $25.7 billion net profit expected in 2024 is a tribute to aviation’s resilience. People love to travel and that has helped airlines to come roaring back to pre-pandemic levels of connectivity. The speed of the recovery has been extraordinary; yet it also appears that the pandemic has cost aviation about four years of growth. From 2024 the outlook indicates that we can expect more normal growth patterns for both passenger and cargo,” said Willie Walsh, IATA’s Director General.

“Industry profits must be put into proper perspective. While the recovery is impressive, a net profit margin of 2.7% is far below what investors in almost any other industry would accept. Of course, many airlines are doing better than that average, and many are struggling. But there is something to be learned from the fact that, on average airlines will retain just $5.45 for every passenger carried. That’s about enough to buy a basic ‘grande latte’ at a London Starbucks. But it is far too little to build a future that is 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. 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,” said Walsh.

Outlook drivers

Overall revenues in 2024 are expected to rise faster than expenses ( 7.6% vs. 6.9%), strengthening profitability. Although operating profits are expected to increase 21.1% ($40.7 billion in 2023 to $49.3 billion in 2024 ), net profit margins increased at less than half the pace ( 10% ) largely due to increased interest rates expected in 2024.

Industry revenues are expected to reach an historic high of $964 billion in 2024. 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. 

Passenger revenues are expected to reach $717 billion in 2024, up 12% from $642 billion in 2023. Revenue passenger kilometers (RPKs) growth is expected to be 9.8% year on year. Although that is more than double the pre-pandemic growth trend, 2024 is expected to mark the end of the dramatic year-on-year increases that have been characteristic of the recovery in 2021-2023. 

The 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 1.8% compared with 2023. 

Reflecting the tight supply and demand conditions, efficiency levels are high with the load factor expected to be 82.6% in 2024, slightly better than 2023 ( 82% ) and the same as in 2019. 

IATA’s November 2023 passenger polling data supports the optimistic outlook.

• A third of travelers polled say they are traveling more than they did pre-pandemic. Some 49% indicate that their travel habits are now similar to pre-pandemic. Only 18% said that they were traveling less.
• Looking ahead, 44% say that they will travel more in the next 12 months than in the previous 12 months. Only 7% say they will travel less and 48% expect to maintain similar levels of travel in the coming 12 months as in the previous 12 months.

Cargo revenues are expected to fall to $111 billion in 2024. That is down sharply from an extraordinary peak of $210 billion in 2021, but it is above 2019 revenues which were $101 billion. Yields will continue to be negatively impacted by the continued growth of belly capacity (related to strong growth on the passenger side of the business) while international trade stagnates. Yields are expected to further correct towards pre-pandemic levels with a -32.2% decline in 2023 followed by a -20.9% decline expected in 2024. They will remain high by historical standards, however. Note that yield progression has been extraordinary in these last years (-8.2% in 2019, +54.7% in 2020, +25.9% in 2021, +7% in 2022, -32.2% in 2023 ).

Expenses are expected to grow to $914 billion in 2024 (+6.9% on 2023 and +15.1% on 2019 ).

The fuel price is expected to average $113.8/barrel (jet) in 2024 translating into total fuel bill of $281 billion, accounting for 31% of all operating costs. Airlines are expected to consume 99 billion gallons of fuel in 2024.

High crude oil prices are expected to continue to be further exaggerated for airlines as the crack spread (premium paid to refine crude oil into jet fuel) is expected to average 30% in 2024.

Industry CO2 emissions in 2024 are expected to be 939 million tonnes from the consumption of 99 billion gallons of fuel. 

The aviation industry will increase its use of Sustainable Aviation Fuels (SAF) and carbon credits to reduce its carbon footprint. We estimate that SAF production could rise to 0.53% of airlines’ total fuel consumption in 2024, adding USD 2.4 billion to next year’s fuel bill. In addition, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is a global market-based carbon offsetting mechanism designed to stabilize international aviation emissions. The CORSIA-related costs are estimated at $1 billion in 2024. 

Non-fuel expenses have been controlled relatively well by airlines despite inflationary pressures. With fixed costs being distributed over a larger scale of activity as the industry recovered from the pandemic, non-fuel unit costs are falling in line with pre-pandemic level. In 2024 we expect non-fuel unit costs of 39.2 cents per available tonne kilometer (ATK) in 2024 which is 1.6% above 2023 levels and matches 2019 levels. Total non-fuel costs are expected to reach $633 billion in 2024.

Industry profitability is fragile and could be affected (positively or negatively) by many factors:

• Global Economic developments: Easing inflation, low unemployment rates, and strong demand for travel are all positive developments. Nonetheless, economic strains could arise. In China, for example, slow growth, high youth unemployment and disarray in property markets if not managed properly, could impact global business cycles. Similarly, should tolerance of high interest rates weaken, and unemployment rise significantly, the strong consumer demand that has supported the recovery could weaken.
• War: The operational impacts of the Ukraine war and the Israel-Hamas war have been largely limited to re-routings due to airspace closures. On the cost side, the conflicts have pushed up oil prices which is impacting airlines globally. An unexpected peace in either or both cases would bring benefits to the industry, but any escalation could produce a radically different global economic scenario to which aviation would not be immune.
• Supply Chains: Supply chain issues continue to impact global trade and business. Airlines have been directly impacted by unforeseen maintenance issues on some aircraft/engine types as well as delays in the delivery of aircraft parts and of aircraft, limiting capacity expansion and fleet renewal.
• Regulatory Risk: On the regulatory front, airlines could face rising costs of compliance, and additional costs pertaining to passenger rights regimes, regional environment initiatives, and accessibility requirements. 

Airline profitability for 2023 performed better than expected in IATA’s June outlook. Revenues for 2023 are now expected to reach $896 billion ($93 billion higher than expected). Expenses also grew to $855 billion ($74 billion higher than the previous forecast). That translated into a $23.3 billion industry wide net profit. Although that is significantly above the $9.8 billion forecast in June, the additional $13.5 billion profit is equal to just 1.4% of revenue. The net profit margin is just 2.6% meaning that airlines will have earned on average $5.44 per passenger carried in 2023.

The improvement was entirely driven by the passenger business that saw revenues increase compared with the previous forecast by $96 billion, to $642 billion. Cargo revenues in 2023 were $134.7 billion, which underperformed the $142.3 billion expected in June.

The Traveler’s Viewpoint

Air travel continues to deliver value to consumers. A recent public opinion poll ( 14 countries, 6,500 respondents who have taken at least one trip in the last year) revealed that 97% of travellers expressed satisfaction with their travel. Moreover, 88% agreed that air travel makes their lives better and 80% agreed that air travel is good value for money.

Consumers can expect airfares to continue to track rising costs, particularly oil. IATA data, however, show that competition continues to drive price benefits for consumers. The average real return air fare in 2023 is expected to be $254 which is 20% lower than the average fare of $315 in 2019 (measured in constant 2018 dollars).

Passengers are counting on a safe, sustainable, efficient and profitable airline industry. IATA public opinion polling demonstrated the important role that travelers see the airline industry playing:

• 89% agreed that air travel is a necessity for modern life
• 89% agreed that air connectivity is critical to the economy
• 88% said that air travel has a positive impact on societies
• 83% said that the global air transport network is a key contributor to the UN Sustainable Development Goals (SDGs)

Aviation remains committed to its goal of achieving net zero emissions by 2050. Travelers are expressing high levels of confidence in this commitment, with 84% believing it is the right goal, 79% saying that we will be able to fly sustainably, and 78% agreeing that aviation leaders are taking the climate challenge seriously.

Credit | shutterstock_2156345751

• Legal challenges in sustainability and compliance
• North Asia looks to the future
• Giving airline data back to the airlines

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Passenger traffic Passenger traffic recovery remains robust

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Iata forecasts $964bn in airline revenue, but profits face challenges.

While growth is expected to continue next year, the post-pandemic recovery may be leveling out

by Lauren Smith

December 11, 2023

Photo: Courtesy of Arno Senoner / Unsplash

According to the International Air Transport Association (IATA), airlines are expected to generate $964 billion in revenue next year, with an estimated 4.7 billion passengers taking flights.

Although this is record-breaking revenue for airlines, profits are expected to remain relatively stable from 2023 onwards due to high interest rates that will reduce margins and cause a plateauing post-pandemic recovery.

Top Demand in 2024

IATA also predicts that the airline industry’s strong performance in 2023 will continue in 2024. This year, airline revenues are expected to reach $896 billion, which is 11.5% higher than the trade association projected in June.

Bolstered by strong demand, net profits across 2023 are expected to rise to $23.3 billion, returning the sector to profitability for the first time since before the pandemic in 2019.

Photo: Courtesy of Kenny Eliason / Unsplash

The travel industry has recently experienced a significant boost, contributing a whopping $642 billion to airline revenues this year. Passenger numbers are expected to increase to 4.7 billion in the coming year, surpassing the previous peak of 4.5 billion travelers recorded in 2019.

Thanks to the high demand and more efficient management of seating capacity, airplanes are expected to take off with fewer empty seats. As a result, the average passenger load factors are predicted to hit 82.6%, the same level recorded in 2019.

Airlines will post net profits of $25.7 billion next year, a “tribute to aviation’s resilience,” said IATA Director General Willie Walsh. “People love to travel, and that has helped airlines come roaring back to pre-pandemic levels of connectivity,” he added.

However, that impressive figure is roughly level with 2023’s profit and reflects a profit margin of 2.7%, flat with 2023’s 2.6% margin.

Margins remain thin

Airlines in North America will continue to lead the pack. The first to return to profitability in 2022, they’re expected to rake in $14.4 billion in net profit, with a profit margin of 4%.

But again, both figures are flat compared to 2024, and the IATA cautions that the supercharged growth the industry has seen as it emerged from the pandemic may be cooling off.

While revenue passenger kilometers will increase by 9.8% year on year, more than double the pre-pandemic growth rate, “2024 is expected to mark the end of the dramatic year-on-year increases that have been characteristic of the recovery in 2021-2023,” IATA said in its report.

Photo: Willie Walsh, Director General, IATA, at Global Media Day in Geneva. Courtesy of IATA

Walsh added that profit margins remain thin. “Industry profits must be put into proper perspective,” he said. “On average, airlines will retain just $5.45 for every passenger carried. That’s about enough to buy a basic grande latte at a London Starbucks.”

“It is far too little to build a future that is 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,” he said.

Vulnerabilities remain strong

In 2024, those difficulties will come in the form of high interest rates, which have pushed the cost of capital to 4.4% higher than airlines’ net profitability.

Photo: Courtesy of Josue Isai Ramos Figueroa / Unsplash

Carriers also remain vulnerable to increases in oil prices, driven by the ongoing wars between Russia and Ukraine and Israel and Palestine. Airlines are expected to spend $281 billion on fuel in 2024, or nearly a third (31%) of their operating costs.

Passengers can expect to cover these higher fuel costs with their fares. However, what Walsh described as “ferocious competition” between airlines will continue to keep tickets affordable and below pre-pandemic rates.

The average return airfare cost $254 in 2023, 20% lower than the $315 average seen in 2019.

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Wind & weather forecast Elektrostal

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Daily forecast

Saturday, mar 30, sunday, mar 31, monday, apr 01, tuesday, apr 02, wednesday, apr 03, thursday, apr 04, friday, apr 05, saturday, apr 06, sunday, apr 07, monday, apr 08, nearby spots (within 25 km).

• Fryazevo 6km
• Noginsk 9km
• Imeni Vorovskogo 10km
• Rakhmanovo 11km
• Pavlovsky Posad 12km
• Obukhovo 13km
• Pavlovsky Posad 14km Weather station Live measurements

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Severe Weather Warnings

Molokovo, Moscow

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Radar & Maps

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Sat, Mar 30

Cloudy and mild; a couple of showers in the afternoon Hi: 51°

Tonight: Mainly clear Lo: 40°

Current Weather

Molokovo weather radar & maps.

Hourly Weather

10-day weather forecast.

A couple of afternoon showers

Night: Mainly clear

Mild with clouds and sunshine

Warmer with some sun

Breezy early; some clouds

Breezy with high clouds

Breezy early; becoming cloudy

Clouds and sun; breezy, mild

Turning cloudy

Low clouds and mild

Mostly sunny

Partly cloudy

An afternoon shower in spots

Cloudy, a little rain late

Partly sunny

Mostly cloudy

Sun & Moon

Air quality.

The air quality is generally acceptable for most individuals. However, sensitive groups may experience minor to moderate symptoms from long-term exposure.

Allergy Outlook

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• Balashikha , Moscow
• Moscow , Moscow
• Zelenograd , Moscow

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