On June 3rd, Cailian Press (Editor Huang Junzhi) reported that the International Air Transport Association (IATA) raised its profit expectations for the global aviation industry in 2024. It is also expected that with a record number of boarding passengers, the industry's revenue will approach $1 trillion.

According to the latest report released by IATA, the global aviation industry is expected to generate a profit of $30.5 billion this year, higher than the upward revision to $27.4 billion in 2023. This forecast is also more optimistic than the $25.7 billion predicted by the association in December last year. Just four years ago, due to the impact of the COVID-19 pandemic, the industry suffered a loss of $140 billion in 2020.

The International Air Transport Association has more than 300 member institutions, accounting for more than 80% of global air transport volume.

The report pointed out that the sustained recovery in global air travel demand is the main factor driving profit growth. With the weakening of the pandemic's impact, people's willingness to travel has increased, providing impetus for the aviation industry to recover quickly. In addition, airlines have effectively reduced costs and increased profitability by optimizing routes and improving operational efficiency.

By region, IATA more than doubled its industry profit forecast for Asia to $2.2 billion by 2024. However, the association stated that North America remains the most profitable region, with profits of $14.9 billion, which is consistent with its previous forecast. "Despite the great pressure of living costs, consumer spending remains strong."

Overall, IATA predicts that total airline industry revenue will reach $996 billion this year, an increase of 9.7% year-on-year, reaching a historic high. Operating profit will reach $59.9 billion. The total number of tourists will reach 4.96 billion, setting a new record.

Willie Walsh, Director General of IATA, said at the annual meeting, "The environment is better than expected, especially in Asia."

Challenges remain.

Despite the recovery in demand, airlines still face a range of new issues, from a lack of sustainable aviation fuel to geopolitical tensions leading to the suspension of some routes.

Another major bottleneck is the shortage of new aircraft, which limits capacity. Boeing and Airbus are both working to produce aircraft at a fast enough rate to meet demand, with hundreds of aircraft backlogged at airlines around the world. IATA warned that its ability to serve strong rebounding travel demand is being affected.

"Solving supply chain problems is critical for us to deploy efficiently and meet demand," Walsh said. Easing heavy regulations and increasing tax reduction proposals will also help.

On the other hand, IATA also stated that while profits are growing, so are expenses, which suppresses revenue that can be obtained from each passenger. Airline activities are widely regarded as a litmus test for business or consumer confidence and trade.

Walsh said, "On average, we only make $6.14 per passenger, which shows how meager our profits are- in many parts of the world, it's not even enough to buy a cup of coffee."

However, because of the limited growth in capacity, average ticket prices have been pushed up. The association currently expects passenger revenue (the average cost paid by passengers per mile flown) to increase by 3.2% compared to 2023.

In contrast, the corresponding forecast for air cargo is expected to decline by 17.5% in 2024, as the cargo market returns to normal after booming during the pandemic.