IATA estimates airline net profits to rise 16% next year

The International Air Transport Association (IATA) estimates that airline net profits will reach $36.6 billion next year, up 16% from 2024. Air transport is at historic highs. Turnover will exceed $1 trillion and a record 5.2 billion passengers will be reached, up 6.7%.

 

“A trillion dollars is a lot: almost 1% of the world economy”, stresses in a statement Willie Walsh, director general of IATA. However, he also reminds that “airlines bear $940 billion in costs, not to mention interest and taxes, so their net profit margin is only 3.6%”.

On the other hand, according toún Walsh, “airlinesíneas take advantageán of lower oil prices by keeping occupancy factors above 83%, tightly controlling costs and investing in decarbonization”.

IATA also highlights the broad benefits of growing connectivity in the commercial aviation sector. The most recent estimates show that airline employment is expected to grow to 3.3 million by 2025.

According to the release, “airlines are the núcleus of a global aviation value chain that employs 86.5 million people and generates $4.1 trillion in economic impact, representing 3.9% of global GDP”, accordingún 2023 figures.

For Walsh, this evolution will involve the creation of a huge number of indirect jobs, especially in hospitality and retail, which “will be prepared to meet the needs of a growing number of tourists”.

IATA does, however, issue some warnings, such as the slowdown in growth opportunities due to supply chain problems or factors linked to the increasing cost of aircraft leasing and maintenance. Likewise, airline profitability could be adversely affected by the increase in tax rates