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Airline profitability in the Middle East is expected to top $3.8 billion in 2024, up 22.5% from the previous year’s $3.1 billion, according to a new forecast by the International Air Transport Association (IATA), despite regional challenges stemming from the Israel-Gaza conflict.
The global airline body, which is hosting its annual general meeting in Dubai for the first time, stated the aviation sector in the Middle East has benefited from several booming economies, led by the UAE and Saudi Arabia, which have been “delivering robust growth in passenger and cargo volumes.”
The net profit per passenger in the Middle East was the highest globally at $15.20 per passenger, beating out more established aviation markets such Europe and the Asia Pacific.
The region’s Revenue Passenger Kilometre (RPK) is forecast to rise by 9.3% year-on-year, while the available seat kilometers (ASK) will rise by 10.8%.
“Although airlines continue to add capacity, yields remain healthy and the demand for travel remains buoyant and looks set to continue apace. Geopolitical risks are the main threat, especially to the Levant carriers. The Gulf carriers are relatively less impacted unless tensions between Iran and Israel escalate,” the report added.
Macro outlook
The global outlook also indicated strengthened profitability for airlines in 2024 compared with IATA’s June and December 2023 forecasts, with net profits expected to reach $30.5 billion in 2024, up from $27.4 billion in 2023.
Total revenues are expected to reach $996 billion for the global airline industry, with total expenses also expected to reach $936 billion, a record high according to IATA.
Passenger revenues are expected to reach $744 billion in 2024, up 15.2% from $646 billion in 2023. Revenue passenger kilometers (RPKs) growth is expected to be 11.6% year on year.
The long-term 20-year growth trend is expected to see passenger demand grow 3.8% annually for the 2023-2043 period.
“The expected aggregate net profit of $30.5 billion in 2024 is a great achievement considering the recent deep pandemic losses. With a record five billion air travellers expected in 2024, the human need to fly has never been stronger,” said Willie Walsh, IATA’s Director General.
“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 added.
(Reporting by Bindu Rai, editing by Daniel Luiz)
