Airline profitability in the Middle East is expected to top USD 3.8 billion in 2024, up 22.5% from 2023’s USD 3.1 billion, according to a new forecast by the International Air Transport Association (IATA), despite regional (mostly geopolitical) challenges stemming from the Israel-Gaza conflict.
As per the report, Etihad, Emirates, Qatar, Saudi, and Oman Air will be driving the majority of the profit estimates. Taking note of these airlines’ extensive networks and superior service quality, IATA stated that these ventures were attracting a growing number of passengers and boosting cargo volumes.
Also, the substantial investments by these airlines in modern fleets and innovative services are enhancing the overall travel experience, making the Gulf region a premier destination. Not only are these carriers reinforcing the region’s overall economic resilience but also playing a crucial role in the broader global aviation industry’s recovery and expansion.
The global airline body, which is hosting its annual general meeting in Dubai for the first time, stated the Gulf region’s aviation sector 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 has remained the highest globally at USD 15.20 per passenger, beating out more established aviation markets such as 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 IATA report added further.
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 USD 30.5 billion in 2024, up from USD 27.4 billion in 2023.
The global aviation body is expecting the overall industry revenue flow to reach USD 996 billion, with total expenses also expected to reach USD 936 billion, a record high according to IATA.
Passenger revenues are expected to reach USD 744 billion in 2024, up 15.2% from the 2023 figure of USD 646 billion. Revenue Passenger Kilometers (RPKs) growth is expected to be 11.6% on a year-on-year basis.
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 further.