Aviation Industry Poised for Full Recovery in 2024

Global air travel is expected to surpass pre-COVID-19 levels in 2024, with the Asia-Pacific region playing a pivotal role in the industry’s resurgence, according to experts. This positive trajectory may mark 2024 as a banner year for airline profits, fuelled by sustained demand.

The aviation sector witnessed a remarkable recovery in 2022 and 2023, bouncing back from unprecedented pandemic-induced losses to nearly 2019 levels. However, challenges such as persistent supply issues and narrow profit margins remain hurdles to the industry’s robust performance.

Subhas Menon, Director-General of the Association of Asia-Pacific Airlines (AAPA), stated, “In 2024, air travel recovery will be complete.” The International Air Transport Association (Iata) predicts that airlines will rake in $25.7 billion in profits in 2024, supported by a record $964 billion in revenue.

While all regions are expected to reach pre-pandemic passenger levels by the end of 2023, the Asia-Pacific region is anticipated to recover fully in early 2024. Global revenue passenger kilometres (RPK), a key indicator of passenger demand, are projected to grow by 9.8% in 2024, surpassing 2019 levels by 4.5%.

However, the industry’s success is closely tied to the recovery of the Chinese market, which remains a significant factor. Challenges in outbound China traffic, including instability in the property market and a weak currency, pose potential downsides. Yet, experts remain optimistic, expecting China to “grow strongly” in 2024, contributing to the Asia-Pacific’s full recovery.

Supply chain issues, particularly in aircraft deliveries and maintenance, are expected to persist through 2024 or even 2025. Manufacturers like Airbus and Boeing and engine manufacturers Pratt & Whitney and Rolls-Royce face disruptions, impacting aircraft availability.

Despite these challenges, the aviation industry is resilient. Although Iata’s projected net profit margin of 2.7% falls below industry expectations, experts believe that factors like macroeconomic conditions, fuel prices, and regional conflicts will influence the industry’s fortunes in 2024.

While challenges persist, the overall sentiment is optimistic. The recovery is deemed complete, and the aviation industry is now looking ahead to a promising future.


Original Article Credit: The Straits Times – THE BUSINESS TIMES https://www.straitstimes.com/business/global-air-travel-will-finally-surpass-pre-covid-levels-in-2024-experts-say