IATA Predicts Gloom For Africa’s Aviation, Says Airlines To Post $0.4 Billion Losses In 2024

Africa as a continent has continued to lag behind in global aviation business as confirmed by the latest prediction of the International Air Transport Association (IATA) that airlines within the continent are expected to incur a combined $0.5bn loss in 2023.
The Africa carriers are also are predicted to narrow their combined losses to $0.4bn in 2024.
The gloomy picture has been attributed to reasons ranging from economic challenges, poor infrastructure and connectivity challenges impacting the industry performance which IATA said has continued to make Africa a difficult market for airlines to operate.
This is contrary to the prediction of IATA that the global airline industry net profits are expected to reach $25.7 billion in 2024, representing. 2.7 percent net profit margin.
The figure which IATA said will be a slight improvement over 2023, is expected to show a $23.3 billion net profit (2.6 percent net profit margin).
This is just as it has been predicted that African airlines are expected to generate losses in both 2023 and 2024.
At the ongoing 2023 Global Media Day conference in Geneva, Switzerland, IATA’s director general, Willie Walsh predicted that in both 2023 and 2024 that the return on invested capital will lag the cost of capital by 4p.p as interest rates around the world have risen in response to the sharp inflationary impulse.
As airline industry operating profits are expected to reach $49.4 billion in 2024 from the $40.7 billion in 2023, total revenues in 2024 are expected to grow 7.6 percent year over year to a record $964 billion.
Expense growth is predicted to be slightly lower at +6.9 percent for a total of &914 billion, some 4.7 billion people are expected to travel in 2024, an historic high that exceeds the pre-pandemic levels of 4.5 billion recorded in 2019.
Cargo volumes are also expected to be 58 and 61 million tones respectively.
IATA has however,attributed the 25.7 billion net expected in 2024 to what it described as a tribute to aviation’s resilience.
IATA again announced that Airline profitability for 2023 performed better than expected just as it has been predicted that revenues for 2023 are now expected to reach $896 billion ($93 billion higher than expected).
Expenses also grew to $855 billion ($74 billion higher than the previous forecast), thus translating into a $23.3 billion industry wide net profit.
While that is significantly above the $9.8 billion forecast in June, the additional $13.5 billion profit is equal to just 1.4% of revenue. The net profit margin is just 2.6% meaning that airlines will have earned on average $5.44 per passenger carried in 2023.
The improvement was entirely driven by the passenger business which saw revenues increase compared to the previous forecast by $96 billion, to $642 billion. Cargo revenues in 2023 were $134.7 billion, which underperformed the $142.3 billion expected in June.
Within the period, passenger revenues are also expected to reach $717 billion in 2024, up 12 percent from $642 billion in 2023.
While revenue passenger kilometers (RPKs) growth is expected to be 9.8 year on year, cargo revenues are expected to fall to $111 billion in 2024 which is down sharply from an extraordinary peak of $210 billion in 2021.
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