Dubai, United Arab Emirates – A record-breaking year for the aviation industry is on the horizon, as the International Air Transport Association (IATA) predicts that airlines will fly nearly five billion passengers in 2024, generating a staggering $1 trillion in revenue. This announcement was made at IATA’s annual general meeting held in Dubai on Monday, where the industry leaders gathered to discuss the future of air travel.
The aviation industry has been hit hard by the COVID-19 pandemic, with grounded fleets and job losses. However, IATA’s latest forecast shows that the industry is set to make a remarkable recovery, with an expected net profit of $30 billion this year, surpassing the previous estimate of $25.7 billion.
Despite the positive outlook, the industry is not without its challenges. IATA also announced that total expenses are expected to reach a record high of $936 billion this year, a 9.4 percent increase from the previous year. This highlights the need for airlines to continue to focus on financial resilience and profitability.
The industry is also under pressure to address its impact on the environment and contribute to the fight against climate change. IATA has set a goal for airlines to reach “net zero” carbon emissions by 2050, and the industry is making progress towards this goal. However, there is still a long way to go.
This year’s expected net profit of $30 billion is a significant achievement, considering the recent losses due to the pandemic. IATA’s director general, Willie Walsh, emphasized the importance of strengthening airline profitability and financial resilience, stating that “aviation is vital to the ambitions and prosperity of individuals and economies.”
However, the return on invested capital is estimated to be 5.7 percent in 2024, which is 3.4 percentage points below the average cost of capital. This highlights the need for airlines to continue to work towards improving their financial performance.
One of the major challenges facing the industry is the rising costs due to labor and parts shortages, as well as the impact of climate change. In April, Dubai’s airport, the world’s busiest for international passengers, was closed due to severe flooding, causing the cancellation of over 2,000 flights. This extreme weather event is a reminder of the urgent need for the industry to address its impact on the environment.
The aviation industry currently accounts for less than 3% of global carbon emissions, but it is often criticized for its environmental impact. To address this, IATA has announced that the production of sustainable aviation fuel (SAF) will triple this year to 1.9 billion liters, or 1.5 million tons. However, SAF will only account for 0.53% of the industry’s fuel needs in 2024, highlighting the need for further efforts to reduce emissions.
IATA estimates that SAF will provide 65% of the industry’s “net zero” mitigation by 2050, with the remaining balance expected to come from greater efficiencies, new technologies, and carbon offsets. This shows the industry’s commitment to reducing its environmental impact and working towards a more sustainable future.
The next few years will also see significant growth in the aviation industry, with IATA’s annual general meeting set to take place in Doha in 2022, Istanbul in 2023, and Dubai this year. This year’s meeting in Dubai is particularly significant as the city is home to the world’s busiest airport for international passengers and serves as a hub for global air travel.
In 2025, IATA’s annual general meeting will be held in New Delhi, the center of an aviation boom in India. The country has seen record-breaking aircraft orders by Indian carriers, highlighting the potential for growth in the region. This further reinforces the importance of the aviation industry in driving economic prosperity and connecting people and businesses across the world.
In conclusion, the aviation industry is set to make a remarkable comeback after the challenges of the pandemic. With record-breaking passengers and revenues, as well as a focus on sustainability, the industry is poised for a bright future. However, it is crucial for airlines to continue to prioritize financial resilience and work towards reducing their environmental impact. As the world recovers from the pandemic, the aviation industry will play a crucial role in connecting people and driving economic growth.
