Airlines on track for $30 billion in profit in 2024: IATA

Airlines are expected to bring in $996 billion in revenue in 2024, according to the International Air Transport Association. However, profit margins remain thin, as year-end profits are expected to be $30 billion.

Yahoo Finance's Seana Smith and Brad Smith break down the latest report and what it signals for the airline industry.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Melanie Riehl

Video transcript

Airlines are expected to bring in $996 billion in revenue this year.

That's according to the International Air Transport Association.

But with all that revenue coming in, the profit margins remain thin, with an expected year end profit of $30 billion.

That's up from the previous estimate of $25.7 billion or just $6.14 per passenger.

So ultimately, we're taking a look at some of these figures and the year over year, the return on invested capital in 2024 as well.

That was an interesting figure to me that's expected to be 5.7%.

That's below the average cost of capital as well.

Uh, and the operating profits, even though they're supposed to be up we're gonna reach $59.9 billion is what they're anticipating.

Um, that compared to what we saw last year $52.2 billion which, if you remember 2023 was the first year that we surpassed some of those pre pandemic markers for traveller, uh, at least passenger throughput via TS A.

And I think when you take a look at the regional basis and some of those expectations there.

That's also interesting when you take a look at the out performance when it comes to North America, they're expected to be the biggest contributor here to industry profits for this year.

And comparing that to Europe.

That's gonna contribute about 9 billion created in North America, which is just around just shy of 15 billion and then following Europe as the Middle East notice.

I didn't say Asia when we talk about some of the underperformance there, a lot of that being attributed to China and some of that weakness there will be holding back the recovery within that region.

So Asia demand remaining subdued yet again, still expected to be below those pre covid levels, so a bit different when you compare it to some of the trends in demand that we're seeing elsewhere around the world.

Yes, slowing growth, youth unemployment and the relative strength of the service sector they mentioned are some of the risks that should be closely watched