This translates to a modest net margin of just over 3 per cent, which, while not record-breaking, signifies a substantial recovery from the financial challenges of recent years.
"Moreover, the global economy counts on air cargo to deliver the $8.3 trillion of trade that gets to customers by air. Without a doubt, aviation is vital to the ambitions and prosperity of individuals and economies," he said. While the airline industry is on the path to sustainable profits, there is a big gap still to cover. A 5.7 per cent return on invested capital is well below the cost of capital, which is over 9 per cent.The airline industry currently earns a mere $6.14 per passenger, an indication of just how thin airline profits are, which Walsh said is barely enough for a coffee in many parts of the world.
Airline demand in Africa, however, is expected to improve with revenue passenger kilometres , a key indicator of how busy airlines are and how much revenue they are generating from passengers, is expected to increase by 8.5 per cent. Despite these headwinds, IATA maintained that there is sustained demand for air travel in Africa, which should allow the market to deliver a second year of profitability.Global airlines' profitability is expected to strengthen in 2024 as revenues grow slightly faster than expenses. Operating profits are expected to reach $59.9 billion, 14.7 per cent higher from $52.2 billion estimated for 2023.
Passenger yields, the average amount of money airlines earn per passenger for each kilometre they fly, are expected to strengthen 3.2 per cent over 2023.
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