In an end-of-year good news for African airlines, The International Air Transport Association (IATA) has announced that they can expect to see a loss reduction in 2024.
The financial bleeding and loss will reduce from $500 million in 2023 to $400 million in 2024. On the other hand, the global aviation industry stands to make a profit of $ 25.7 billion.
The forecast was presented by Willie Walsh, the director general of IATA, as part of the global airline industry outlook in Geneva, Switzerland.
Although the global aviation industry is anticipated to generate approximately $964 billion in revenue in 2024, African air carriers still face challenges.
Some of these challenges are:
- High rate of inflation
- Currency fluctuations
- Lower rate of travel
- High cost of petroleum resources
Albeit the industry is showing resilience across Africa.
Willie Walsh highlighted that the net profit margin of 2.7% remains below industry expectations despite the impressive speed of recovery. The projection indicates global airline net profits will reach $25.7 billion in 2024. A slight improvement over the estimated $23.3 billion net profit for 2023.
In his report, Walsh acknowledged the global aviation challenges. For most parts of the industry, these were regulatory burdens, fragmentation, high infrastructure costs, and supply chain uncertainties.
What more can African and global airlines expect in 2024?
Regarding passenger numbers, IATA estimates that around 4.7 billion people will travel in 2024. This number surpasses the most in pre-pandemic levels recorded in 2019.
However, fuel prices are expected to average $113.8 per barrel in 2024, accounting for 31% of all operating costs and totalling $281 billion. Walsh expressed optimism for more normal growth patterns in the post-pandemic era.
Despite the positive outlook for global aviation, Walsh emphasized the need for a resilient future. The warning came on top of the industry’s substantial contribution to global GDP and livelihoods.
He underscored the need to address challenges faced by airlines, ranging from regulatory issues to high infrastructure costs and uncertainties in the supply chain.
In summary, the IATA projections suggest a mixed scenario for African airlines, with reduced losses but ongoing challenges that impact their operations.
The global aviation industry’s recovery showcases resilience. However, the net profit margin highlights the need for continued efforts to navigate hurdles and build a more robust future.
Obinabo Tochukwu Tabansi is a supply chain mastro and writer with a decade of experience working in different facets of the supply chain. Today he is living his passion for writing on all things supply chain. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the supply chain complexities on the continent.
