Author: Admin

July 22, 2024 by Payload Asia

Mr. Mark Sutch (left) and Mr. GertJan Roelands (right) signing the agreement at IndiGo’s Head office in Delhi.

Air France KLM Martinair Cargo (AFKLMP) and IndiGo CarGo are pleased to announce the signing of an extensive Interline Agreement connecting their expansive networks. This marks the first step in their collaborative efforts to further develop a robust cargo partnership. This Special Prorate Agreement will be effective as of 16 July 2024.

The agreement was signed during a meeting at IndiGo’s headquarters. In addition to the signing, the two parties discussed steps to strengthen their collaboration and to explore ways in which they can extend their cooperation in the coming years.

GertJan Roelands, Senior Vice President Commercial, Air France KLM Martinair Cargo said, “India is a strategic growth market for AFKLMP Cargo. Having a strong partner in India is a great building block in our network strategy. The cooperation between IndiGo CarGo and AFKLMP Cargo will give our customers even more choice and solutions.”

Mark Sutch, Chief Commercial Officer, IndiGo CarGo said, “We are consistently expanding IndiGo CarGo’s network and capabilities. The strategic focus on growing international presence is greatly complemented by our partnership with Air France KLM Martinair Cargo. This collaboration not only broadens our service offerings but also allows us to leverage their extensive global reach, thereby providing our customers with a wider array of options across diverse geographies.”

Both companies look forward to better serving the global cargo market, leveraging their complementary networks to provide enhanced services and explore new opportunities in airfreight transportation.

Other Topics: Air Cargo Network, Air Express, Air France-KLM-Martinair Cargo, Air Freight Services, Air Logistics, Asia Pacific Air Cargo, Asia Pacific Air Freight, Asia Pacific Air Logistics, Asia Pacific Shipments, Cargo Flights, E-Commerce Logistics, Express Delivery, Express Logistics, IndiGo CarGo, International Air Shipments, International Express Delivery, Transpacific Air Cargo, Transpacific Air Freight.

31 July 2024       No. 36

Geneva – The International Air Transport Association (IATA) released data for June 2024 global passenger demand with the following highlights:

• Total demand, measured in revenue passenger kilometers (RPK), was up 9.1% compared to June 2023. Total capacity, measured in available seat kilometers (ASK), was up 8.5% year-on-year. The June load factor was 85.0% (+0.5 percentage points (ppt) compared to June 2023).
• International demand rose 12.3% compared to June 2023. Capacity was up 12.7% year-on-year and the load factor improved to 85.0% (-0.3ppt on June 2023).
• Domestic demand rose 4.3% compared to June 2023; capacity was up 2.1% year-on-year and the load factor was 85.0% (+1.7ppt compared to June 2023).

“Demand grew across all regions as the peak Northern summer travel season began in June. And with overall capacity growth lagging demand we saw a very strong average load factor of 85% achieved in both domestic and international operations. Operating with such high load factors is both good and challenging. It makes it even more important for all the stakeholders to operate with equal levels of efficiency to minimize delays and get travelers to their destinations on schedule,” said Willie Walsh, IATA’s Director General.

 

“As the Olympic Games unfold in Paris there is pride across the aviation industry for its continuing role in supporting the Olympic story by bringing many of the athletes, fans, and officials together. It is a great reminder of how aviation transforms our very big world into a global community. We wish France every success as the host of the games and cheer all the athletes who will demonstrate the best of human endeavor over the next weeks,” said Walsh.

Air passenger market in detail – June 2024

(% year-on-year)            World share1     RPK        ASK        PLF (%-pt)           PLF (level)

Total Market      100%     9.1%      8.5%      +0.5%    85.0%

Africa    2.1%      16.2%    5.8%      +6.9%    77.1%

Asia Pacific          31.7%    12.5%    9.4%      +2.3%    82.9%

Europe 27.1%    8.1%      8.4%      -0.2%     87.7%

Latin America     5.5%      9.1%      7.3%      +1.4%    84.2%

Middle East        9.4%      9.9%      9.5%      +0.3%    79.5%

North America  24.2%    5.4%      7.3%      -1.6%     87.6%

1% of industry RPKs in 2023

Regional Breakdown – International Passenger Markets

All regions showed strong growth for international passenger markets in June 2024 compared to June 2023.

Asia-Pacific airlines’ growth remained strong, with a 22.6% year-on-year increase in demand. Capacity increased 22.9% year-on-year and the load factor was 83.0% (-0.2ppt compared to June 2023). The Africa-Asia route was the fastest expanding regional pair, growing 38.1%.

European carriers saw a 9.1% year-on-year increase in demand. Capacity increased 9.8% year-on-year, and the load factor was 87.4% (-0.6ppt compared to June 2023).

Middle Eastern airlines saw a 9.6% year-on-year increase in demand. Capacity increased 9.4% year-on-year and the load factor was 79.7% (+0.1ppt compared to June 2023).

North American carriers saw a 6.6% year-on-year increase in demand. Capacity increased 8.6% year-on-year, and the load factor was 88.7% (-1.6 ppt compared to June 2023), the highest among regions.

Latin American airlines saw a 15.3% year-on-year increase in demand. Capacity climbed 15.6% year-on-year. The load factor was 85.1% (-0.2ppt compared to June 2023).

African airlines saw a 16.9% year-on-year increase in demand. Capacity was up 5.8% year-on-year. The load factor rose to 77.0% (+7.4ppt compared to June 2023). This was the largest improvement in load factor among all regions.

Domestic markets

Domestic demand increased in June, with solid growth in most key markets, bar Japan and Australia. Brazil posted the largest gain with 7.6% year-on-year growth. Year-on-year June domestic ticket sales for July and August travel dipped -0.9%, pointing to a gradual moderation in demand back to pre-pandemic growth rates.

 

Air passenger market in detail – June 2024

June 2024

(% year-on-year)             World share1     RPK        ASK        PLF (%-pt)           PLF (level)

Domestic             39.9%    4.3%      2.1%      +1.7%    85.0%

Dom. Australia  0.8%      -1.0%     -1.2%     +0.2%    81.0%

Dom. Brazil         1.2%      7.6%      3.2%      +3.4%    82.3%

Dom. China P.R.                11.2%    5.5%      -2.0%     +5.9%    83.0%

Dom. India          1.8%      5.2%      9.6%      -3.6%     87.1%

Dom. Japan        1.1%      -0.2%     -0.2%     -0.1%     73.1%

Dom. US              15.4%    5.1%      7.1%      -1.7%     86.8%

1% of industry RPKs in 2023

Note: the six domestic passenger markets for which broken-down data are available account for approximately 31.4% of global total RPKs and 78.8% of total domestic RPKs

▪    IATA (International Air Transport Association) represents some 330 airlines comprising more than 80% of global air traffic.

▪    You can follow us at twitter.com/iata for announcements, policy positions, and other useful industry information.

▪    Fly Net Zero

▪    Statistics compiled by IATA Economics using direct airline reporting complemented by estimates, including the use of FlightRadar24 data provided under license.

▪    All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures are subject to revision.

▪    Domestic RPKs accounted for about 39.9% of the total market in 2023. The six domestic markets in this report account for 31.4% of global RPKs.

▪    Explanation of measurement terms:

‒  RPK: Revenue Passenger Kilometers measures actual passenger traffic

‒  ASK: Available Seat Kilometers measures available passenger capacity

‒  PLF: Passenger Load Factor is % of ASKs used.

▪    IATA statistics cover international and domestic scheduled air traffic for IATA member and non-member airlines.

▪    Total passenger traffic market shares by region of carriers for 2023 in terms of RPK are: Asia- Pacific 31.7%, Europe 27.1%, North America 24.2%, Middle East 9.4%, Latin America 5.5%, and

Africa 2.1%.

 

 

30 July 2024        No. 35

Geneva – The International Air Transport Association (IATA) released data for June 2024 global air cargo markets showing continuing strong annual growth in demand. This contributed to an exceptional first half-year performance for air cargo, with volumes exceeding 2023, 2022, and even the record-breaking 2021 levels.

• Total demand, measured in cargo tonne-kilometers (CTKs*), rose by 14.1% compared to June 2023 levels (15.6% for international operations). This is the seventh consecutive month of double-digit year-on-year growth.
• Capacity, measured in available cargo tonne-kilometers (ACTKs), increased by 8.8% compared to June 2023 (10.8% for international operations).
• Total half-year (H1) demand increased by 13.4% compared to H1 2023, by 4.3% compared to H1 2022, and by 0.02% compared to H1 2021.

“Air cargo demand surged in June. Strong growth across all regions and major trade lanes combined for a record-breaking first-half performance in terms of CTKs. Maritime shipping constraints and a booming e-commerce sector are among the strongest growth drivers. Meanwhile, the sector has remained largely impervious to ongoing political and economic challenges, and the US customs crackdown on e-commerce deliveries from China. Air cargo looks to be on solid ground to continue its strong performance into the second half of 2024,” said Willie Walsh, IATA’s Director General.

Several factors in the operating environment should be noted:

• In June the Purchasing Managers Index (PMI) for global manufacturing output indicated expansion (52.3) while the new export orders PMI registered a small contraction, falling below the critical 50-point benchmark to 49.3.
• Global cross-border trade expanded 0.1% month-on-month in May while industrial production stayed level compared to the previous month.
• Inflation was a mixed picture in June. In the EU and Japan, inflation rates stayed roughly constant compared to the previous month at 2.6% and 2.8% respectively, while dropping in the US to 3.0%. In contrast, China’s inflation rate remained near zero (0.3%) reflecting weak domestic demand amid high unemployment, slow income growth, and a crisis in the real estate sector, a trend that has persisted since 2023.

Air cargo market in detail – June 2024

June 2024

(% year-on-year)             World share1     CTK        ACTK     CLF (%-pt)           CLF (level)

Total Market      100%     14.1%    8.8%      2.1%      45.8%

Africa    2.0%      11.8%    23.8%    -4.1%     38.5%

Asia Pacific          33.3%    17.0%    10.7%    2.7%      49.6%

Europe 21.4%    16.1%    9.1%      3.0%      50.7%

Latin America     2.8%      13.1%    15.5%    -0.7%     33.6%

Middle East        13.5%    13.8%    6.9%      2.9%      47.3%

North America  26.9%    9.5%      6.0%      1.3%      39.8%

1% of industry CTKs in 2023

June Regional Performance

Asia-Pacific airlines saw 17.0% year-on-year demand growth for air cargo in June — the strongest among all regions. Demand on the Africa-Asia trade lane grew by 37.5% year-on-year, while the Europe-Asia, Within Asia and Middle East-Asia trade lanes rose by 20.3%, 21.0% and 15.1% respectively. Capacity increased by 10.7% year-on-year.

North American carriers saw 9.5% year-on-year demand growth for air cargo in June — the weakest among all regions. Demand on the North America-Europe route saw an increase of 6.7%, while the Asia-North America trade lane, the world’s largest, grew by 12.8% year-on-year, the largest annual increase in five months. June capacity increased by 6.0% year-on-year.

European carriers saw 16.1% year-on-year demand growth for air cargo in June. Intra-European air cargo rose by 16.7% compared to June 2023, the sixth month in a row of double-digit annual growth. Europe–Middle East and Europe–Asia routes saw demand increase by 30.2% and 20.3% respectively. June capacity increased 9.1% year-on-year.

Middle Eastern carriers saw 13.8% year-on-year demand growth for air cargo in June. As mentioned above, the Middle East–Europe market performed particularly well with 30.2% annual growth, ahead of Middle East–Asia which grew by 15.1% year-on-year. June capacity increased 6.9% year-on-year.

 

Latin American carriers saw 13.1% year-on-year demand growth for air cargo in June. Capacity increased 15.5% year-on-year. Notably, Latin America posted the second-highest increase in international demand growth at 17.2% in June, up 6.3 percentage points compared to the previous month.

African airlines saw 11.8% year-on-year demand growth for air cargo in June. Demand on the Africa–Asia market increased by 37.5% compared to June 2023, the strongest performance of all trade lanes. June capacity increased by 23.8% year-on-year.

>Read the latest Cargo Market Analysis

For more information, please contact:

Corporate Communications

Tel: +41 22 770 2967

Email: corpcomms@iata.org

Local firms are now paying up to 50 per cent more to ship goods by air instead of sea, in order to avoid months of shipping delays.

Air freight rates in Singapore set to continue rising amid worldwide port congestion

A FedEx cargo plane on the tarmac at Fort Lauderdale-Hollywood International Airport on Apr 20, 2021, in Fort Lauderdale, Florida, US. (Photo: AP)

With cargo planes packed for the next two months, industry players expect air freight rates to continue going up. This is especially as peak delivery season approaches.

In May, CNA reported that shipping delays in Singapore more than doubled in recent weeks amid port congestion and a shortage of container ships.

This was due to various factors such as diversions caused by unrest in the Red Sea.

At the time, port operator PSA Singapore said the volatility was likely here to stay, and it would continue to ramp up capacity and smart technologies in its terminals.

According to the International Air Transport Association, demand for air cargo in the Asia-Pacific region has gone up to about 20 per cent on-year in May. However, supply for air capacity only stands at 9 per cent.

For e-commerce company Singapore Home Cooks, flying a 95kg cargo from source markets like Japan and South Korea costs about S$1,000 (US$740) – five times more than shipping it by sea.

But sea freight is a risk the firm cannot take, given that it brings in perishable items like fruits and snacks.

It has raised prices slightly, explaining to customers that this is due to higher logistics costs, said the firm’s corporate communications manager Canlian Liew.

“I think 80 per cent (of the time), we absorb the cost ourselves, and then only 20 per cent we will do a little bit more mark-up,” she added.

The firm sources products from overseas, especially exclusive items that are usually not available in Singapore, and sells them through Facebook livestreaming. It then usually works with a logistics partner to ship the items over.

Sea shipments have been delayed to at least a month due to port congestion. A year ago, it would have taken half that time for cargo to arrive in Singapore.

“Last time, it was one ship all the way to Singapore so it’s very straightforward,” noted Ms Liew.

 

“But right now, they use a different route. Every different point, our cargo gets unloaded and reloaded onto a different ship, and then that’s where they … are not able to track the shipment anymore. So they are also not able to give us an estimated timeline,” she added.

This means the company cannot assure their customers that goods will arrive within the usual delivery timeline of four to six weeks, Ms Liew said.

She recounted: “I remember the experience that my admin team had was that every single day, there were customers chasing us for updates. Asking, ‘Hey, when (are) my shipments coming? When is my mushroom arriving? Has the shipment arrived in Singapore?’

“Luckily, a majority of our customers are quite understanding, because the port congestion is something that is not up to us to control.”

She said that about 20 per cent of customers asked for refunds, which means the company also incurred losses.

Shipping delays, higher freight rates: Ports in Asia, including Singapore, see heavy congestion

Air freight rates rise amid Red Sea crisis and in run-up to Chinese New Year

LOGISTIC PROVIDERS EXTEND NETWORKS

Logistic providers said that companies should plan ahead and work closer with their freight forwarders to avoid any delays.

To cope with rising air freight demand, the providers also told CNA they are working hard to extend their networks.

Mr Vincent Wong, Asia airfreight director from global logistics firm CH Robinson Freight Services, said it has expanded its portfolio of airlines by about 30 per cent over the last two years.

“These airlines … each have their own network, so as we add new airlines into our portfolio, their network becomes part of our network and that also becomes part of our customer network. And together, it becomes a solution,” he added.

The company has seen an uptick of about 20 per cent in inquiries on switching from sea to air freight.

Mr Wong said costs were already rising after the COVID-19 pandemic, making it unsustainable to go back to pre-pandemic rates.

“We started the year with rates increasing almost every month,” he added.

“Right now, it’s supposed to be the low season, but we’re definitely not seeing any low season this period.”

 

Geneva–The International Air Transport Association (IATA) is collaborating with the Aviation Sustainability Forum (ASF) to launch a standardized Cabin Waste Composition Audit (CWCA), with the ASF Cabin Waste Composition Auditing Platform to be launched in September 2024.

CWCA audits have already been trialed in two waves, covering 25 flights (short, medium, and long-haul) at Singapore’s Changi Airport in November 2023 and April 2024. ASF conducted the audits based on a methodology developed by IATA. Preliminary results indicate that the sector is generating over 3.6 million metric tonnes of cabin and catering waste annually, with 65% being food and beverage waste. Untouched meals account for 18% of all waste.

Audit data will guide the airline industry and policy makers in their efforts to reduce the levels of waste produced and improve circularity by identifying opportunities for re-use and re-cycling. Previous IATA research identified the lack of a standardized methodology with respect to conducting cabin waste audits and, as a result, harmonized data is not available to underpin decision-making by policymakers, airlines, and caterers regarding waste-related issues. A standardized audit will help solve these issues and enable the sector to demonstrate progress towards waste reduction and improved circularity.

“Managing and reducing waste is an important component of aviation’s overall sustainability. Obtaining standardized and comparable data regarding the composition and quantity of waste from flights will help the industry to reduce the waste it generates. Better data will also help policymakers to harmonize regulations, which in turn can help optimize the industry’s capability to sort, re-cycle and safely re-use waste that cannot be avoided. Working with ASF in developing this audit program is a significant step forward in improving the circularity of the sector,” said Marie Owens Thomsen, IATA’s Senior Vice President Sustainability and Chief Economist.

“The ASF’s mission is to help the aviation sector reduce the levels of cabin waste generated and achieve higher levels of waste recovery and circularity. Working with IATA to develop a cabin waste composition auditing standard for the sector is a significant step forward. Effectively managing cabin waste is a challenge that can be solved with the backing of data. It is the responsibility of the sector and its regulators to come together, understand the problem and align on the needed solutions,” said Matt

 

4 June 2024

Dubai –  The International Air Transport Association (IATA), Emirates, and Airbus have joined forces to deliver a Competency-Based Training and Assessment (CBTA) program for the Airbus A350 type rating, as Emirates prepares for the delivery of its fleet of 65 A350s from mid-2024. An initial cohort of 256 pilots will be trained as part of the new course at Emirates’ Training college in Dubai starting from July 2024.

The joint work combines the respective expertise of the three organizations.

• IATA will focus on program design using its published guidance for CBTA
• Airbus will contribute knowledge of the aircraft along with its own CBTA experience
• Emirates will use its CBTA training and operational experience

This collaboration will create and deliver the first A350 type rating training in full alignment with the latest International Civil Aviation Organization (ICAO) standards for CBTA training and with the best practices contained in the IATA CBTA Guide for Flight Crew Training.

“Combining the expertise of Emirates, Airbus and IATA to design and deliver A350 type rating training is a unique opportunity. Our joint aim is to fully utilize the benefits of CBTA to qualify the pilots on the A350 in the most efficient and effective way possible. And by doing it together all three organizations will also gain valuable experience that can strengthen their other training activities,” said Nick Careen, IATA’s SVP for Operations, Safety and Security.

“Emirates uses cutting-edge training programs so our pilots are among the most competent flight crew in the world. The tailored CBTA program for the A350 supports the integration of 65 new A350 aircraft, with 1,000 pilots set to complete the A350 Type Rating course. This commitment enhances passenger safety and comfort, reflecting our unwavering dedication to the highest service standards,” said Capt. Bader Al Marzooqi, Emirates’ Senior Vice President, Flight Training.

“The A350 is a state-of-the-art aircraft, which requires equally advanced training solutions. Our partnership with IATA and Emirates ensures that Emirates pilots receive the most comprehensive and effective training, supporting the smooth entry into service of the A350 worldwide,” said Capt. Stéphan Labrucherie, Airbus Head of Flight Training Worldwide.

About CBTA

As the demand for pilots grows worldwide, efficient and effective training methodologies are evermore critical. CBTA has proven itself a successful solution to this need. By using real-world training scenarios, it focuses on the competences needed to manage complex combinations of operational and environmental situations that crew face. An example of such a scenario could be landing in a high-density traffic area in adverse weather conditions.

CBTA and IATA

Gaining the benefits and efficiencies of CBTA training is a longstanding industry objective. For flight crew, IATA is supporting this with its CBTA Guide for Flight Crew Training, which is fully aligned with ICAO CBTA standards and includes specific libraries for Airlines/Operators and Training Organizations.

IATA also focuses on CBTA training in support of the IATA Dangerous Goods Regulations. The IATA CBTA Center supports organizations across the aviation industry, including operators, Civil Aviation Authorities, and training organizations, in developing the capabilities and resources for dangerous goods training programs. It also offers CBTA training specialized for various airline functions from ground handlers to passenger agents, load planning, crew and others.

3 June 2024

Dubai – The International Air Transport Association (IATA) announced that IndiGo will host the 81st IATA Annual General Meeting (AGM) and World Air Transport Summit in Delhi, India, on 8-10 June 2025.

“We look forward to gathering the aviation industry in Delhi, India’s gateway city, for the 81st IATA AGM in 2025. It’s been over four decades since the industry came together for an IATA AGM in Delhi. With record aircraft orders, impressive growth, and world-class infrastructure developments, India is firmly on the trajectory to become the world’s third largest aviation market within this decade.  With such bright prospects, it’s the perfect time for the IATA AGM to return to India and witness these exciting developments first hand,” said Willie Walsh, IATA’s Director General.

“IndiGo is proud to be host airline for the 81st IATA AGM and looks forward to welcoming the global aviation community to Delhi in 2025. India, becoming the third largest economy within the next few years and leading the fourth industrial revolution with the use of AI, is a nation on the move. India’s rise in the global aviation landscape over the last years has been nothing short of remarkable, said Pieter Elbers, CEO, IndiGo.

“IndiGo has been giving wings to the nation since 2006 and increasingly also expands internationally. Building on aviation as a force for good and India’s unique diversity, we are looking forward to engaging in meaningful dialogues aimed at sculpting the global aviation landscape around important topics such as safety, diversity, equity and inclusion, as well as sustainability, while efficiently delivering the growing global demand for air travel,” said Elbers.

The decision to host the 81st IATA AGM in India was made at the 80th IATA AGM in Dubai. This will be the third time the IATA AGM has convened in Delhi, having previously visited India in 1958 and 1983.

 

3 June 2024         No. 25

Dubai – The International Air Transport Association (IATA) announced that the number of airline CEOs committing to the IATA Safety Leadership Charter has reached 73. This reinforces aviation’s already strong safety culture which contributed to some best-ever results in 2023, including no fatalities among IATA member airlines or the airlines on the IATA Operational Safety Audit Registry.

“Strong leadership and strong safety culture are interdependent. And both are needed to drive continuous improvements in safety performance. By putting their names to the IATA Safety Leadership Charter, 73 airline CEOs have set an example for their airlines and for the industry. In doing so, the Charter is a call to action that keeps in focus the critical obligation of airline CEOs to lead a safety culture that keeps their passengers and staff safe,” said Willie Walsh, IATA’s Director General.

The IATA Safety Leadership Charter was developed in consultation with IATA members and the wider aviation community. Its aim is to support industry executives in evolving a positive safety culture within their organizations around eight leadership principles.

• Reinforcing safety through both words and actions.
• Fostering safety awareness among employees, the leadership team, and the board.
• Guiding the integration of safety into business strategies, processes, and performance measures.
• Creating the internal capacity to proactively manage safety and collectively achieve organizational safety goals.
• Creating an atmosphere of trust, where all employees feel responsible for safety and are encouraged and expected to report safety-related information.
• Establishing a working environment in which clear expectations of acceptable and unacceptable behaviors are communicated and understood.
• Creating an environment where all employees feel responsibility for safety.
• Regularly assessing and improving an organizational Safety Culture.

IATA aims to support the industry in continuously improving safety performance with a three-pillar strategy consisting of:

• Safety Leadership (including both safety leadership and culture),

 

• Safety Risk (identifying and mitigating risks through data collection and analysis from audits, accident reports, and other sources)
• Safety Connect (providing the links so that safety leaders report, discuss, and resolve safety issues).

Dubai – The International Air Transport Association (IATA) announced strengthened profitability projections for airlines in 2024 compared with its June and December 2023 forecasts. An aggregate return above the cost of capital, however, continues to elude the global airline industry.

Outlook highlights include:

• Net profits are expected to reach $30.5 billion in 2024 (3.1% net profit margin). That will be an improvement on 2023 net profits which are estimated to be $27.4 billion (3.0% net profit margin). It is also an improvement on the $25.7 billion (2.7% net profit margin) forecast for 2024 profits that IATA released in December 2023.
• Return on invested capital in 2024 is expected to be 5.7%, which is about 3.4 percentage points (ppt) below the average cost of capital.
• Operating profits are expected to reach $59.9 billion in 2024, up from an estimated $52.2 billion in 2023.
• Total revenues are expected to reach $996 billion (+9.7%) in 2024—a record high.
• Total expenses are expected to reach $936 billion (+9.4%) in 2024—a record high.
• Total travelers are expected to reach 4.96 billion in 2024—a record high.
• Total air cargo volumes are expected to reach 62 million tonnes in 2024.

 

“In a world of many and growing uncertainties, airlines continue to shore-up their profitability. 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 travelers expected in 2024, the human need to fly has never been stronger. 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. Strengthening airline profitability and growing financial resilience is important. Profitability enables investments in products to meet the needs of our customers and in the sustainability solutions we will need to achieve net zero carbon emissions by 2050,” said Willie Walsh, IATA’s Director General.

“The airline industry is on the path to sustainable profits, but there is a big gap still to cover. A 5.7% return on invested capital is well below the cost of capital, which is over 9%. And earning just $6.14 per passenger is an indication of just how thin our profits are—barely enough for a coffee in many parts of the world. To improve profitability, resolving supply chain issues is of critical importance so we can deploy fleets efficiently to meet demand. And relief from the parade of onerous regulation and ever-increasing tax proposals would also help. An emphasis on public policy measures that drive business competitiveness would be a win for the economy, for jobs, and for connectivity. It would also place us in a strong position to accelerate investments in sustainability,” said Walsh.

Outlook Drivers

Profitability is expected to strengthen in 2024 as revenues grow slightly faster than expenses (+9.7% vs. +9.4% respectively). Operating profits are expected to reach $59.9 billion (+14.7% from $52.2 billion estimated for 2023). Net profits, however, are expected to grow slightly more slowly at +11.3%, from $27.4 billion estimated for 2023 to $30.5 billion estimated for 2024.

Revenue

Industry revenues are expected to reach an historic high of $996 billion in 2024.

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.

• Passenger yields are expected to strengthen 3.2% over 2023.
• When measured in constant 2018 dollars, the real average return airfare in 2024 is expected to be $252, significantly less than the $306 of 2019. This continues the trend of ever-increasing affordability for air travel, even if the figures are somewhat skewed by shorter journey distances in 2024 due to the slower pace of recovery in some long-haul markets. In line with this, IATA’s April 2024 polling data revealed that 77% of respondents agree that air travel is good value for money.
• The average passenger load factor is expected to be 82.5% in 2024. This is largely in line with pre-pandemic levels (82.6% in 2019) and reflects tight supply and demand conditions from ongoing supply chain issues for aircraft and engines.

IATA’s April 2024 polling data aligned with expectations for continued strong performance in passenger markets.

• Some 39% of respondents expect to travel more over the next 12 months than they did in the previous 12-month period. The majority (54%) said that they expect to travel as much as they did in the previous 12 months. Only 6% reported that they expect to travel less.
• Some 46% of respondents expect to spend more on travel over the next 12 months than they did in the previous 12 months. An almost equal proportion (45%) expect to spend the same on travel over the next twelve months while 9% expect to spend less.

Cargo revenues are expected to fall to $120 billion in 2024 (from $138 billion in 2023). Both are down sharply from the extraordinary peak of $210 billion in 2021, but it is above 2019 revenues, which were $101 billion and an improvement on the previous forecast of $111 billion (announced in December 2023).

Despite the strength of demand, cargo yields are expected to fall 17.5% in 2024 while remaining slightly above 2019 levels. This is a normalization after extraordinary pandemic highs. A key factor in this is the significant belly capacity that entered the market in 2023 in tandem with the recovery of passenger travel.

In general, air cargo is in a period of correction following an exceptional year in 2021. Yields, capacity growth, the belly-dedicated freighter split, and other key metrics are moving from the extraordinary mid-pandemic situation towards a continuation of pre-pandemic trends and levels.

Expenses

Industry expenses are expected to grow to $936 billion in 2024 (+9.4% on 2023).

Fuel is expected to average $113.8/barrel (jet) in 2024 translating into a total fuel bill of $291 billion, accounting for 31% of all operating costs.

• High crude oil prices are expected to continue to be further exaggerated for airlines as the crack spread (premium paid to refine crude oil into jet fuel) is expected to average 30% in 2024.
• SAF production could rise to satisfy 0.53% of global demand for fuel in 2024, the cost of which will be $3.75 billion. That is $2.4 billion additional to what it would cost to purchase the same quantity of jet fuel. CORSIA-related costs are estimated to account for a further $600 million in 2024.
• Industry CO2 emissions in 2024 are expected to be 935 million tonnes from consumption of 99 billion gallons of fuel.

Non-fuel expenses have been well-controlled. Non-fuel unit costs are expected to be 39 cents per available tonne kilometer (ATK), unchanged from 2023. This is slightly below the 39.2 cents/ATK reported in 2019.

• Labor costs have been tightly controlled with unit labor costs expected to be 12.9 cents/ATK, an improvement of 2.4% compared with 2023. Due to higher volumes, the overall cost of labor is expected to grow 7.6% to $214 billion in 2024.
• Total employment in airlines is expected to reach 3.07 million, which slightly exceeds the 2.93 million employed in 2019.

Fleet

An inventory of 38.7 million flights is expected to be available in 2024. This is 1.4 million flights below previous estimates (December 2023) largely attributable to the slowing pace of deliveries in the face of persistent supply chain issues in the aerospace sector. For example, the number of aircraft deliveries scheduled for 2024 is expected to be 1,583, which is 11% less than the expectations published just months ago that anticipated 1,777 aircraft would join the global fleet in 2024. Airlines are deploying larger aircraft as a mitigating strategy.

Risks

Industry profitability is fragile and could be affected positively or negatively by many factors:

• Global economic developments: Airline prospects have historically been closely linked to global economic trends. Nonetheless, the sector has been largely resilient in the face of inflation, high interest rates, and slowing GDP growth in the post-pandemic period.

Economic developments in China should be closely watched. Slowing growth, youth unemployment, and the relative strength of the service sector over manufacturing are all indications that China’s economy is in transition, which could have broad impacts beyond its borders.

• War: The operational impact of the Russia-Ukraine war and the Israel-Hamas war have been largely limited to the immediate vicinity of these conflicts. An escalation of either conflict has the potential to shift the economic outlook negatively.
• Supply chains: Supply chain issues continue to affect global trade and business. Airlines have been directly impacted by unforeseen maintenance issues on some aircraft/engine types as well as delays in the delivery of aircraft parts and of aircraft, limiting capacity expansion and fleet renewal.
• Regulatory risk: On the regulatory front, airlines could face rising costs of compliance, and additional costs pertaining to passenger rights regimes, regional environment initiatives, and accessibility requirements.
• Public policy: With more people going to the polls than in any other year, 2024 has the potential to significantly shift the global political landscape. Although a greater political focus on business-friendly policies and strengthening economies would be welcome, a political shift away from global institutions, international trade, and policy paralysis from polarized politics would likely be detrimental. Further, as airlines redouble their decarbonization efforts, any slipping in the political determination to reach net zero carbon emissions by 2050 could risk the policy support that airlines need to achieve this important goal.

Regional Roundup

In 2024, all regions are expected to generate profits for a second year in a row with the most significant increase being for Asia-Pacific carriers.

North America

2023 Net Profit (e) (margin) (per passenger) 2024 Net Profit (f) (margin) (per passenger) 2024 Demand (RPK) 2024 Capacity (ASK)     $14.8 billion (4.7%) ($12.40) $14.8 billion (4.5%) ($13.10) +7.0% +8.1%

North America continues to be the most significant contributor to industry profits, supported by a high passenger load factor, robust yields, and strong consumer spending despite cost-of-living pressure. In 2024, passenger demand (RPK growth of 7%) and a strong load factor at 84% are expected to strengthen revenue development and operating profitability. Canada is seeing slower growth in traffic and greater wage pressure than the US market.

Europe

2023 Net Profit (e) (margin) (per passenger) 2024 Net Profit (f) (margin) (per passenger) 2024 Demand (RPK) 2024 Capacity (ASK)     $8.6 billion (4.0%) ($7.28) $9.0 billion (3.8%) ($6.93) +11.1% +11.5%

Europe has a positive outlook on performance with demand expected to remain strong in 2024.  However, supply chain issues, together with high interest rates and the risk of labor disputes could limit the prospects for further near-term increases in profitability.

Asia-Pacific

2023 Net Profit (e) (margin) (per passenger) 2024 Net Profit (f) (margin) (per passenger) 2024 Demand (RPK) 2024 Capacity (ASK)     $0.6 billion (0.2%) ($0.40) $2.2 billion (0.7%) ($1.20) +17.1% +14.1%

Asia-Pacific is expected to be responsible for half of the world’s RPK growth in 2024 driven largely by recovering domestic markets in China, Japan, and Australia. International travel in the region remains subdued, especially in China, where it is still below the pre-COVID levels. This indicates that there is still a lot of pent-up demand for cross-border travel in the region, which will likely boost future growth prospects.

Latin America

2023 Net Profit (e) (margin) (per passenger) 2024 Net Profit (f) (margin) (per passenger) 2024 Demand (RPK) 2024 Capacity (ASK)     $0.2 billion (0.5%) ($0.70) $0.6 billion (1.4%) ($1.90) +8.2% +8.1%

 

Latin America has seen a steady improvement in financial performance since 2020, even as the performance across the region has been mixed. Where financial performance is lagging, this is largely a consequence of the economic and social turmoil observed in parts of the region. Countries in Central America, especially Mexico, El Salvador, Guatemala, and Honduras are key contributors to the region’s growth in profits. The improved outlook for 2024 is supported by the airlines in the region reporting strong sales growth and high profitability in the first quarter of the year and raising their guidance for the full year.

Middle East

2023 Net Profit (e) (margin) (per passenger)	2024 Net Profit (f) (margin) (per passenger)	2024 Demand (RPK)	2024 Capacity (ASK)
$3.1 billion (4.9%) ($12.70)	$3.8 billion (5.3%) ($15.20)	+9.3%	+10.8%

 

The Middle East benefits from the strength of both the region’s economies and its global hubs. The United Arab Emirates continues to benefit from its attractiveness to both leisure and business travelers.  Meanwhile, Saudi Arabia’s massive investments in infrastructure and tourism are delivering robust growth in passenger and cargo volumes. 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.

Africa

2023 Net Profit (e) (margin) (per passenger)	2024 Net Profit (f) (margin) (per passenger)	2024 Demand (RPK)	2024 Capacity (ASK)
$0.1 billion (0.4%) ($0.50)	$0.1 billion (0.6%) ($0.90)	+8.5%	+9.1%

Africa has a high operational cost base and a low propensity to spend on air travel. Moreover, connectivity challenges dampen the industry’s expansion and performance. Despite these headwinds, there is sustained demand for air travel, which should allow the market to deliver a second year of profitability.

2023

Airline profitability for 2023 was better than expected in IATA’s December outlook. Revenues for 2023 are now expected to have reached $908 billion ($12 billion higher than the previous forecast). Expenses grew to $856 billion ($1 billion higher than the previous forecast). That translated into a $27.4 billion industry wide net profit ($4.0 billion higher than the previous forecast). As a result, the net profit margin for 2023 was 3.0%, which is above the previously forecast 2.6%.

The Traveler’s Viewpoint

Air travel continues to deliver value to consumers. IATA’s April 2024 public opinion poll revealed that 97% of travelers expressed satisfaction with their travel. Moreover, 91% agreed that connectivity by air is critical for the economy and 89% said it has a positive impact on societies.

Passengers are counting on a safe, sustainable, efficient, and profitable airline industry. IATA public opinion polling demonstrated the important role that travelers see the airline industry playing:

• 86% said that business travel is an easy investment to justify.
• 77% agreed that air travel is good value for money.
• 90% said that air travel is a necessity for modern life.
• 83% recognized that the global air transport network is a key contributor to the UN Sustainable Development Goals.

Aviation remains committed to its goal of achieving net zero carbon emissions by 2050. Travelers are expressing high levels of confidence in this commitment, with 82% believing it is the right goal, 76% saying that we will be able to fly sustainably, and 78% agreeing that aviation leaders are taking the climate challenge seriously.

 

 

9 May 2024

Reykjavík – The International Air Transport Association (IATA) today released a global progress report on the implementation of baggage tracking. Focused on IATA Resolution 753, which requires tracking baggage at acceptance, loading, transfer and arrival, the survey of 155 airlines and 94 airports reveals that:

• 44% of airlines have fully implemented Resolution 753 and a further 41% are in progress
• Regional variation in airline full adoption rates vary from 88% in China and North Asia, to 60% in the Americas, 40% in Europe and Asia-Pacific, and 27% in Africa
• 75% of airports surveyed have the capability for Resolution 753 baggage tracking
• Airport preparedness for Resolution 753 varies by size*: 75% of mega airports are capable, 85% of major airports, 82% of large airports and 61% of medium airports.
• Optical barcode scanning is the dominant tracking technology implemented by the majority of airports (73%) surveyed. Tracking using RFID, which is more efficient, is implemented in 27% of surveyed airports. Notably, RFID technology has seen higher adoption rates at mega airports, with 54% already implementing this advanced tracking system.

“Between 2007 and 2022 baggage mishandling reduced by nearly 60%. That is good news. But travelers expect better; and the industry is determined to make further improvements. Tracking bags at acceptance, loading, transfer and delivery will give the industry the data it needs to improve. Tracking reduces overall mishandlings and helps airlines reunite mishandled bags with their owners even faster. With 44% of airlines already fully implementing Resolution 753 tracking and a further 41% in progress, travelers can have even more confidence that their bags will be at the carousel on arrival,” said Monika Mejstrikova, IATA Director Ground Operations.

In 2022, the global rate of mishandled bags was 7.6 per 1,000 passengers, according to SITA. The majority of these were returned within 48 hours.

Accelerating Modern Baggage Messaging

Resolution 753 requires airlines to exchange baggage tracking messages with interline partners and their agents. The current baggage messaging infrastructure depends on legacy technologies using costly Type B messaging. This high cost adversely affects the implementation of Resolution 753 and contributes to issues with message quality, leading to an increase in baggage mishandling.

 

IATA is leading the industry’s transition from Type B to modern baggage messaging based on XML standards. The first pilot to test modern baggage messaging between airport and airlines is planned for launch in 2024.

“Adopting modern messaging is the equivalent of implementing a new standard, intelligible language for use by airlines, airports, and ground handling staff so they can effectively communicate about passenger luggage. In addition to helping reduce the number of mishandled bags implementation also sets the stage for ongoing innovations in baggage management systems,” said Mejstrikova.

IATA resolution 753 was adopted by June in 2018. In 2024, IATA launched a campaign to assist airlines with the implementation. The campaign focuses on collecting data on the implementation status of airlines and providing support to member airlines to develop and execute their implementation plans. This initiative underscores IATA’s commitment to enhancing operational efficiencies and standards across the industry.