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IATA and ICAO Extend Cooperation on Implementing Global Standards for Dangerous Goods Shipments by Air

Geneva- The International Air Transport Association (IATA) and the International Civil Aviation Organization (ICAO) have extended their long-standing cooperation on setting and implementing global standards for the safe carriage of dangerous goods by air. An agreement to this effect was concluded at the IATA Executive Offices in Geneva during a visit by ICAO Secretary General Juan Carlos Salazar during which greater collaboration between the two organizations was discussed.

IATA began issuing guidance for the carriage of Dangerous Goods on aircraft back in 1956 and has been updating and devising standards ever since. A more formalized approach on this subject was taken at a regulatory level by the adoption of ICAO Annex 18 in January 1984. This outlines the broad principles for the international transport of dangerous goods. Technical Instructions For The Safe Transport of Dangerous Goods by Air amplify the basic provisions of Annex 18 and contain all the detailed instructions necessary for the safe international transport of dangerous goods by air. In addition, they provide guidance to States for inspection and oversight.

Based on the Technical Instructions agreed on at government level through ICAO, IATA works with the aviation industry to develop the applicable practical tools and operational recommendations. These are issued as the Dangerous Goods Regulations and are global standards applicable to the entire value chain – manufacturers, shippers, airlines, freight forwarders and ground handlers. These regulations include operator variations, supporting documents, tools, guidelines and notes which are essential for a practical, consistent approach to the safe acceptance, inspection, handling and carriage of dangerous goods on aircraft.

“The safe carriage of dangerous goods has become common practice, thanks to the strict adherence to global standards and guidelines. Today’s agreement ensures that dangerous goods will continue to be handled according to the highest globally applicable standards. To this effect, IATA will continue its advocacy work with key stakeholders to maintain a globally aligned, and practically focused approach to the regulated transport of dangerous goods. This will lead to more efficient and robust supply chains whilst upholding aviation’s number one priority of safety”, said Willie Walsh, IATA’s Director General.

Air Travel Reaches 99% of 2019 Levels as Recovery Continues in November

10 January 2024                No: 2

Geneva – The International Air Transport Association (IATA) released data for November 2023 air travel performance indicating that air travel demand topped 99% of 2019 levels.

•    Total traffic in November 2023 (measured in revenue passenger kilometers or RPKs) rose 29.7% compared to November 2022. Globally, traffic is now at 99.1% of November 2019 levels.

•    International traffic rose 26.4% versus November 2022. The Asia-Pacific region continued to report the strongest year-over-year results (+63.8%) with all regions showing improvement compared to the prior year. November 2023 international RPKs reached 94.5% of November 2019 levels.

•    Domestic traffic for November 2023 was up 34.8% compared to November 2022. Total November 2023 domestic traffic was 6.7% above the November 2019 level. Growth was particularly strong in China (+272%) as it recovered from the COVID travel restrictions that were still in place a year ago. US domestic travel, benefitting from strong Thanksgiving holidays demand, reached a new high, expanding +9.1% over November 2019.

“We are moving ever closer to surpassing the 2019 peak year for air travel. Economic headwinds are not deterring people from taking to the skies. International travel remains 5.5% below pre-pandemic levels but that gap is rapidly closing. And domestic markets have been above their pre-pandemic levels continuously since April,” said Willie Walsh, IATA’s Director General.

Air passenger market in detail – November 2023

 November 2023

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

Total Market      100.0%  29.7%    28.6%    0.7%      81.8%

Africa    2.1%      20.3%    27.1%    -4.0%     70.4%

Asia Pacific          22.1%    80.1%    71.7%    3.8%      81.4%

Europe 30.8%    13.6%    13.5%    0.1%      83.7%

Latin America     6.4%      12.0%    9.1%      2.2%      84.4%

Middle East        9.8%      18.7%    18.4%    0.2%      77.7%

North America  28.8%    10.2%    11.3%    -0.8%     82.7%

1% of industry RPKs in 2022   

International Passenger Markets

Asia-Pacific airlines had a 63.8% rise in November traffic compared to November 2022, which was the strongest year-over-year rate among the regions. Capacity rose 58.0% and the load factor was up 2.9 percentage points to 82.6%.

European carriers’ November traffic climbed 14.8% versus November 2022. Capacity increased 15.2%, and load factor declined 0.3 percentage points to 83.3%.

Middle Eastern airlines saw an 18.6% traffic rise in November compared to November 2022. November capacity increased 19.0% versus the year-ago period, and load factor fell 0.2 percentage points to 77.4%.

North American carriers experienced a 14.3% traffic rise in November versus the 2022 period. Capacity increased 16.3%, and load factor fell 1.4 percentage points to 80.0%.

Latin American airlines’ November traffic rose 20.0% compared to the same month in 2022. November capacity climbed 17.7% and load factor increased 1.7 percentage points to 84.9%, the highest of any region.

African airlines had a 22.1% rise in November RPKs versus a year ago. November 2023 capacity was up 29.6% and load factor fell 4.3 percentage points to 69.7%, the lowest among regions.

Domestic Passenger Markets

Air passenger market in detail – November 2023

 November 2023

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

Domestic             41.9%    34.8%    32.5%    1.4%      82.4%

Dom. Australia  1.0%      13.2%    7.6%      4.3%      85.3%

Dom. Brazil         1.5%      2.3%      -0.1%     1.9%      82.7%

Dom. China P.R.                6.4%      272.0%  212.4%  12.4%    77.4%

Dom. India          2.0%      10.9%    12.9%    -1.5%     86.2%

Dom. Japan        1.2%      5.9%      0.4%      4.2%      80.0%

Dom. US              19.2%    8.9%      9.8%      -0.7%     83.7%

1% of industry RPKs in 2022   

Note: the six domestic passenger markets for which broken-down data are available account for approximately 31.3% of global total RPKs and 74.6% of total domestic RPKs

 Air passenger market in detail – November 2023

 November 2023

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

Total Market      100%     29.7%    28.6%    0.7%     

International      58.1%    26.4%    26.0%    0.3%     

Domestic             41.9%    34.8%    32.5%    1.4%     

November 2023

(% ch vs the same month in 2019)            World share1     RPK        ASK        PLF (%-pt)           PLF (level)

Total Market      100%     -0.9%     -1.8%     0.8%      81.8%

International      58.1%    -5.5%     -6.8%     1.1%      81.3%

Domestic             41.9%    6.7%      6.4%      0.2%      82.4%

1% of industry RPKs in 2022

The Bottom Line

“Aviation’s rapid recovery from COVID demonstrates just how important flying is to people and to businesses. In parallel to aviation’s recovery, governments recognized the urgency of transitioning from jet fuel to Sustainable Aviation Fuel (SAF) for aviation’s decarbonization. The Third Conference on Aviation Alternative Fuels (CAAF/3) in November saw governments agree that we should see 5% carbon savings by 2030 from SAF. This was followed up at COP28 in December where governments agreed that we need a broad transition from fossil fuels to avoid the worst effects of climate change.  Airlines don’t need convincing. They agreed to achieve net zero carbon emissions by 2050 and every drop of SAF ever made in that effort has been bought and used. There simply is not enough SAF being produced. So we look to 2024 to be the year when governments follow-up on their own declarations and finally deliver comprehensive policy measures to incentivize the rapid scaling-up of SAF production,” said Walsh.

Air Cargo Demand Up 8.3% in November

 9 January 2024  No: 1

Geneva – The International Air Transport Association (IATA) released data for November 2023 global air cargo markets indicating the strongest year-on-year growth in roughly two years. This is partly due to weakness in November 2022, but also reflects a fourth consecutive month of strengthening demand for air cargo.

Global demand for air cargo, measured in cargo tonne-kilometres (CTKs), increased by 8.3% compared to November 2022. For international operations, demand growth was 8.1%.

Capacity, measured in available cargo tonne-kilometres (ACTKs), was up 13.7% compared to November 2022 (+11.6% for international operations). Most of the capacity growth continues to be attributable to the increase in belly capacity as international passenger markets continue their post-COVID recovery.

Compared to November 2019 (pre-COVID-19), demand is down 2.5% while capacity is up 4.1%.

Some indicators to note include:

•    Both the manufacturing output and new export order Purchasing Managers Indexes (PMIs) – two leading indicators of global air cargo demand—continued to hover just below the 50-mark in November with small positive movements indicating a deceleration of the economic slowdown.

•    Global cross-border trade recorded growth for the third consecutive month in October, reversing its previous downward trend.

•    Inflation in major advanced economies continued to soften in November as measured by the corresponding Consumer Price Index (CPI), centering around 3% year-on-year for the United States, Japan, as well as the EU, in November. In the meantime, China exhibited negative annual growth in its CPI for the second time in a row.

 •    Air cargo yields (including surcharges) continued their significant upward trend (+8.9% since October). Rising yields are in line with improving air cargo load factors over recent months. This could be tied in part to booming e-commerce deliveries from China to western markets.

“November air cargo demand was up 8.3% on 2022—the strongest year-on-year growth in almost two years. That is a doubling of October’s 3.8% increase and a fourth month of positive market development. It is shaping up to be an encouraging year-end for air cargo despite the significant economic concerns that were present throughout 2023 and continue on the horizon,” said Willie Walsh, IATA’s Director General.

Air cargo market in detail – November 2023

 November 2023

(% year-on-year)             World share1     CTK        ACTK     CLF (%-pt)2         CLF (level)3

Total Market      100.0%  8.3%      13.7%    -2.3%     46.7%

Africa    2.0%      3.9%      14.0%    -4.1%     42.1%

Asia Pacific          32.4%    13.8%    29.6%    -6.6%     47.9%

Europe 21.8%    6.7%      6.5%      0.1%      57.0%

Latin America     2.7%      4.2%      7.7%      -1.2%     36.3%

Middle East        13.0%    13.5%    15.4%    -0.8%     46.9%

North America  28.1%    1.8%      4.0%      -0.9%     40.8%

1% of industry CTKs in 2022   2year-on-year change in load factor   3Load Factor Level

November Regional Performance (total market)

Asia-Pacific airlines saw their air cargo volumes increase by 13.8% in November 2023 compared to the same month in 2022. This performance was significantly above the previous month’s growth of 7.6%. Available capacity for the region’s airlines increased by 29.6% compared to November 2022 as more belly capacity came online with the removal of COVID-19 restrictions.

North American carriers had the weakest demand growth in November with a 1.8% increase (YoY) in cargo volumes. This was, nonetheless, a significant improvement in performance compared to October’s -1.8% contraction. Capacity increased by 4.0% compared to November 2022.

European carriers saw their air cargo volumes increase by 6.7% in November compared to the same month in 2022. This was a stronger performance than in October (1.0%). Capacity increased 6.5% in November 2023 compared to 2022.

Middle Eastern carriers had the strongest performance in November 2023, with a 13.5% year-on-year increase in cargo volumes. This was similar to the significant improvement noted in the previous month’s performance (+13.0%). Capacity increased 15.4% compared to November 2022.

Latin American carriers experienced a 4.2% increase in cargo volumes compared to November 2022, very similar to the 4.0% year-on-year increase recorded for October. Capacity in November was up 7.7% compared to the same month in 2022.

African airlines saw their air cargo volumes increase by 3.9% in November 2023, slightly improved compared to October’s +2.9% growth performance. Capacity was 14.0% above November 2022 levels.

The Big Picture: 2024 Supply Chain Industry Outlook

Author  Chris Rogers

Big PictureCOVID-19Supply ChainTrade

The outlook for global supply chains has faced a decade of disruptions. The most significant have included the US-China trade war, the COVID-19 pandemic-era consumer goods boom and the Russia-Ukraine war. Supply chain disruptions have also included a variety of natural disasters, financial failures and operational difficulties.

Supply chain activity has normalized in operational terms during 2023, but there are significant risks across the industrial policy, labor action and environmental policy implementation spheres influencing the supply chain industry outlook for 2024.

Supply chains need to be more resilient, but questions remain over whether corporations and their investors are willing to make the investments necessary to fortify them. There is no shortage of technology available to enable supply chain resilience, with generative AI as the latest example. But most companies need to see short-term returns on investment, and recent experiences with block chain, for instance, are leaving some hesitant.

•  Paying for resilience in a high-cost environment

Shrinking corporate profit margins and higher relative capital expenditures signal that reinvesting in capital stock may take priority for companies over spending on supply chains in 2024.

•  Technology toolkit for enabling resilience

Deploying technology to enable supply chain resilience requires close attention to return-on-investment. While some large enterprises have the resources to take gambles on emerging technologies, most players in the supply chain space will not spend for digital transformation without a near certainty of return on their investment in a reasonable period.

•  Delivering supply chain resilience through organizational agility

Building a robust supply chain is a long-term process, whether through adapting inventory policy and adopting new technologies or fundamentally retooling sourcing via supplier choice or international diversification.

•  Resilience still needed, spending not guaranteed

Supply chain resilience will be just as important in 2024 as it was in the past three years, yet corporate willingness and ability to invest in inventory management and multi sourcing may be limited by falling profits and high financing costs.

oneworld® Becomes First Airline Alliance to join IATA CO2 Connect

19 December 2023

Geneva- The International Air Transport Association (IATA) and the oneworld Alliance will work together in the field of CO2 emission calculations with all 13 oneworld member airlines committing to contributing operational data to IATA’s CO2 Connect emissions calculator. This will further improve the quality and accuracy of the tool, as the percentage of airline-specific fuel burn data used by the calculator will substantially increase, with the data provided by the following oneworld member airlines: Alaska Airlines, American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, Malaysia Airlines, Qatar Airways, Qantas, Royal Air Maroc, Royal Jordanian, and SriLankan Airlines.

IATA Senior Vice President, Sustainability and Chief Economist, Marie Owens Thomsen said: “travelers want to make informed choices regarding their CO2 footprint and IATA CO2 Connect set out to provide CO2 emission calculations based on operational data. We are delighted that oneworld will become the first airline alliance to join this initiative, bringing in its 13 member airlines as data contributors. Their decision underscores the importance of the industry’s objective of providing consistency and alignment in this field.”

oneworld Environmental and Sustainability Board Chair and General Manager Sustainability, Cathay Pacific, Grace Cheung said: “oneworld is proud to be the first global airline alliance to support IATA’s work to provide customers with high-quality estimates of the CO2 emissions of their flights. Our collaboration with IATA on CO2 Connect will in turn help key players across the aviation sector, including airlines, aircraft manufacturers and travel management companies among others, to make better and more informed choices for travelers and enhanced ESG reporting.”

IATA launched CO2 Connect in June 2022, with the objective of using member airline data, such as fuel burn, belly cargo and load factors, to provide high-quality per flight passenger CO2 emission calculations. Paired with other IATA and open market data sources, IATA CO2 Connect calculates CO2 emissions for 74 aircraft types, representing ~98% of the active global passenger fleet, and considers traffic data from 881 aircraft operators representing ~93% of global air travel.

IATA CO2 Connect data calculations are available to industry partners through an API or flat file, as well as via airline sales channels and travel management companies.

In a recent opinion poll*, 90% of travelers stated that they have a responsibility to know about the carbon emissions of their flight, but only two in five actually do so. And while 84% of those surveyed acknowledged that it is easy to find tools to accurately estimate their carbon emissions, the vast majority (90%) expect airlines or travel agents to provide them with this information, indicating a reliance on the industry to proactively inform passengers about the carbon impact of their flights.

IATA CO2 Connect will continue to evolve and include new features, having just launched a corporate reporting solution to support the demand to accurately report CO2 emissions from business travel, and next year will be introducing CO2 compensation solutions to support airlines and other industry partners. A Cargo calculator is also in development to launch in 2024, supporting demands from shippers and freight forwarders to access accurate CO2 emissions derived from actual airline data.

Methodology

IATA CO2 Connect utilizes the Passenger CO2 Calculation Methodology (RP 1726) adopted by IATA’s Passenger Service Conference in March 2022. This was conceived with support from leading partners from 20 airlines and major aircraft manufacturers, in consultation with international standard-setting bodies and logistics services providers. The methodology includes factors such as:

•             Guidance on fuel measurement, aligned with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)

•             Clearly defined scope to calculate CO2 emissions in relation to airlines’ flying activities

•             Guidance on non-CO2 related emissions and Radiative Forcing Index (RFI)

•             Weight based calculation principle: allocation of CO2 emission between passenger and belly cargo

•             Guidance on passenger weight, using actual and standard weight

•             Emissions factor for conversion of jet fuel consumption to CO2, fully aligned with CORSIA

•             Cabin class weighting and multipliers to reflect different cabin configurations of airlines

•             Guidance on carbon offsets and sustainable aviation fuel (SAF) as part of the CO2 calculation.

About oneworld

oneworld brings together 13 world-class airlines – Alaska Airlines, American Airlines, British Airways, Cathay Pacific Airways, Finnair, Iberia, Japan Airlines, Malaysia Airlines, Qantas, Qatar Airways, Royal Air Maroc, Royal Jordanian, and SriLankan Airlines. Fiji Airways is a oneworld connect partner. oneworld member airlines work together to deliver consistently a superior, seamless travel experience, with special privileges and rewards for frequent flyers, including earning and redeeming miles and points across the entire alliance network. Learn more about the oneworld Alliance at oneworld.com.

Follow us on Facebook, Instagram, Twitter and LinkedIn. For media queries, please contact press@oneworld.com

Lufthansa confirms combined Boeing and Airbus order for up to 200 aircraft

BY IAN MOLYNEAUX

Lufthansa order boeing airbus

Lufthansa Group

The Lufthansa Group has announced that it has placed aircraft orders with Boeing and Airbus for a total of up to 200 jets. 

Announced on December 19, 2023, Lufthansa said the orders are respectively for 40 Boeing 737 MAX 8s, with the option for 60 more in the future and 40 Airbus A220-300s for Lufthansa City Airlines, with the potential for an additional 20 more. The agreement with Airbus also included an option to order 40 aircraft from the Airbus A320 family.

“The Lufthansa Group was one of the first customers for the A220 and has successfully operated the aircraft in its SWISS route network ever since. We are delighted by this testimony of confidence from our long-standing partner and customer,” Christian Scherer, Chief Commercial Officer and Head of Airbus International, said. “As the only clean sheet design aircraft and specifically designed for the 100-150 seat market the A220 is the most efficient solution in its category to support Lufthansa Group meeting its exciting airline development and sustainability objectives.”

Avion In-Article Banner December 2023

The cumulated firm deals are confirmed as costing $9 billion with deliveries of the aircraft expected from 2026 to 2032.

Lufthansa said that through the order it is “accelerating the largest fleet modernization” in the airline’s history.

“We are pleased that both Airbus and Boeing were able to convince us on all commercial and technological aspects,” said Detlef Kayser, Member of Lufthansa’s Executive Board, responsible for commercial and technical fleet management. “In addition to this, the decision for the Boeing 737-8 MAX will also give us more flexibility for the procurement of short- and medium-haul aircraft in the future. The new ultra-modern aircraft offer our guests additional comfort.”

The 40 Boeing 737 MAX 8s and 40 Airbus A220-300s bring Lufthansa Group firm orders from around 200 to 280 aircraft.

“Our relationship with the Lufthansa Group has led to a number of industry changing achievements and we are delighted to see the 737 return to an original launch customer’s fleet,” Stan Deal, President and CEO, Boeing Commercial Airplanes, said. “The Lufthansa Group has set bold targets to decarbonize its operations. The 737-8 will help the Lufthansa Group meet those sustainability targets with significant improvements in fuel use, emissions, and community noise impacts, all while reducing costs for the airline.”

The Lufthansa Group’s current Boeing order backlog includes firm orders for 34 787 Dreamliners, seven 777-8 Freighters and 20 777-9 planes.

Singapore Airlines announces non-stop A350 Singapore to London-Gatwick flights

BY

LUKE PETERS

Soos Jozsef / Shutterstock

Singapore Airlines has announced it plans to commence direct flights between Singapore Changi Airport (SIN) and London-Gatwick Airport (LGW) from June 2024.

The new service will operate five times weekly using Singapore Airlines’ 63-strong fleet of Airbus A350-900 aircraft departing Singapore at 23:55 on Mondays, Thursdays, Fridays, Saturdays, and Sundays and arriving at 06:25 the following day. The flight number allocated will be SQ310 for the westbound leg of the new route.

The return leg, flight SQ309, will operate from London-Gatwick Airport to Singapore on Mondays, Tuesdays, Fridays, Saturdays, and Sundays departing at 10:15 and arriving at 06:20 the following day.

Avion In-Article Banner December 2023

The first flight is set to depart Singapore for Gatwick Airport on June 21, 2024, and all services are subject to regulatory approval. According to a company statement, tickets for the new services will be progressively made available for sale from December 19, 2023.

“London has always been a very important market for the Singapore Airlines Group,” said Dai Haoyu, SIA’s acting senior vice-president of marketing planning. With the introduction of this new service to London Gatwick Airport, Singapore Airlines customers will have an additional flight to choose from when flying between Singapore and the UK. It also opens up additional travel opportunities to other points in Europe and the Asia-Pacific region.”

Fasttailwind / Shutterstock

The new service supports the carrier’s existing flights to London’s Heathrow Airport (LHR), which operates four times daily using a combination of Boeing 777-300ERs and Airbus A380s. The additional service will increase the airline’s total number of flights to the UK to 33 services per week, with 28 flights from the two London airports and a further five services from Manchester to Singapore which utilizes A350-900s.

The addition of London-Gatwick services raises the total number of European destinations in the Singapore Airlines global network to 141.

In a statement issued by the carrier, the airline points out that the early morning arrival of SQ309 from London-Gatwick will offer options for passengers to connect to other services offered by both Singapore Airlines and its budget subsidiary Scoot, to destinations in Southeast Asia, Australia, and New Zealand.

“We are delighted to welcome Singapore Airlines to London-Gatwick,” said Stewart Wingate, London Gatwick’s CEO. “The new flight service showcases the high regard in which Gatwick is held and will also provide huge connectivity potential for passengers across London and Southeast Asia.”

The Singapore Airlines Airbus A350-900s that will be used on the new route are configured for 253 passengers across three classes of travel – 42 in business class, 24 in premium economy, and 187 in economy class.

Airlines Set to Earn 2.7% Net Profit Margin on Record Revenues in 2024

Geneva – The International Air Transport Association (IATA) announced strengthened profitability projections for airlines in 2023, which will then largely stabilize in 2024. However, net profitability at the global level is expected to be well below the cost of capital in both years. Very significant regional variations in financial performance remain.

Outlook highlights include:

•    Airline industry net profits are expected to reach $25.7 billion in 2024 (2.7% net profit margin). That will be a slight improvement over 2023 which is expected to show a $23.3 billion net profit (2.6% net profit margin).

•    In both 2023 and 2024 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.

•    Airline industry operating profits are expected to reach $49.3 billion in 2024 from $40.7 billion in 2023.

•    Total revenues in 2024 are expected to grow 7.6% year over year to a record $964 billion.

•    Expense growth is expected to be slightly lower at 6.9% 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 level of 4.5 billion recorded in 2019.

•    Cargo volumes are expected to be 58 and 61 million tonnes in 2023 and 2024, respectively.

“Considering the major losses of recent years, the $25.7 billion net profit expected in 2024 is a tribute to aviation’s resilience. People love to travel and that has helped airlines to come roaring back to pre-pandemic levels of connectivity. The speed of the recovery has been extraordinary; yet it also appears that the pandemic has cost aviation about four years of growth. From 2024 the outlook indicates that we can expect more normal growth patterns for both passenger and cargo,” said Willie Walsh, IATA’s Director General.

“Industry profits must be put into proper perspective. While the recovery is impressive, a net profit margin of 2.7% is far below what investors in almost any other industry would accept. Of course, many airlines are doing better than that average, and many are struggling. But there is something to be learned from the fact that, on average airlines will retain just $5.45 for every passenger carried. That’s about enough to buy a basic ‘grande latte’ at a London Starbucks. But it is far too little to build a future that is resilient to shocks for a critical global industry on which 3.5% of GDP depends and from which 3.05 million people directly earn their livelihoods. Airlines will always compete ferociously for their customers, but they remain far too burdened by onerous regulation, fragmentation, high infrastructure costs and a supply chain populated with oligopolies,” said Walsh.

Overall revenues in 2024 are expected to rise faster than expenses (7.6% vs. 6.9%), strengthening profitability. While operating profits are expected to increase by 21.1% ($40.7 billion in 2023 to $49.3 billion in 2024), net profit margins increased at less than half the pace (10%) largely due to increased interest rates expected in 2024.

Revenue: Industry revenues are expected to reach an historic high of $964 billion in 2024. An inventory of 40.1 million flights is expected to be available in 2024, exceeding the 2019 level of 38.9 million and up from the 36.8 million flights expected in 2023.

•    Passenger revenues are expected to reach $717 billion in 2024, up 12% from $642 billion in 2023. Revenue passenger kilometers (RPKs) growth is expected to be 9.8% year on year. While that is more than double the pre-pandemic growth trend, 2024 is expected to mark the end of the dramatic year-on-year increases that have been characteristic of the recovery in 2021-2023.

The high demand for travel coupled with limited capacity due to persistent supply chain issues continues to create supply and demand conditions supporting yield growth. Passenger yields in 2024 are expected to improve by 1.8% compared to 2023.

Reflecting the tight supply and demand conditions, efficiency levels are high with the load factor expected to be 82.6% in 2024, slightly better than 2023 (82%) and the same as in 2019.

IATA’s November 2023 passenger polling data supports the optimistic outlook.

•    A third of travelers polled say they are traveling more than they did pre-pandemic. Some 49% indicate that their travel habits are now similar to pre-pandemic. Only 18% said that they were traveling less.

•    Looking ahead, 44% say that they will travel more in the next 12 months than in the previous 12 months. Only 7% say they will travel less and 48% expect to maintain similar levels of travel in the coming 12 months as in the previous 12 months.

•    Cargo revenues are expected to fall to $111 billion in 2024. That is down sharply from an extraordinary peak of $210 billion in 2021, but it is above 2019 revenues which were $101 billion. Yields will continue to be negatively impacted by the continued growth of belly capacity (related to strong growth on the passenger side of the business) while international trade stagnates. Yields are expected to further correct towards pre-pandemic levels with a -32.2% decline in 2023 followed by a -20.9% decline expected in 2024. They will remain high by historical standards, however. Note that yield progression has been extraordinary in these last years (-8.2% in 2019, +54.7% in 2020, +25.9% in 2021, +7% in 2022, -32.2% in 2023).

Expenses: are expected to grow to $914 billion in 2024 (+6.9% on 2023 and +15.1% on 2019).

•    Fuel price is expected to average $113.8/barrel (jet) in 2024 translating into total fuel bill of $281 billion, accounting for 31% of all operating costs. Airlines are expected to consume 99 billion gallons of fuel in 2024.

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.

Industry CO2 emissions in 2024 are expected to be 939 million tonnes from consumption of 99 billion gallons of fuel.

The aviation industry will increase its use of Sustainable Aviation Fuels (SAF) and carbon credits to reduce its carbon footprint. We estimate that SAF production could rise to 0.53% of airlines’ total fuel consumption in 2024, adding USD 2.4 billion to next year’s fuel bill. In addition, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is a global market-based carbon offsetting mechanism designed to stabilize international aviation emissions. The CORSIA-related costs are estimated at $1 billion in 2024.

•    Non-fuel expenses have been controlled relatively well by airlines despite inflationary pressures. With fixed costs being distributed over a larger scale of activity as the industry recovered from the pandemic, non-fuel unit costs are falling in line with pre-pandemic level. In 2024 we expect non-fuel unit costs of 39.2 cents per available tonne kilometer (ATK) in 2024 which is 1.6% above 2023 levels and matches 2019 levels. Total non-fuel costs are expected to reach $633 billion in 2024.

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

•    Global Economic developments: Easing inflation, low unemployment rates, and strong demand for travel are all positive developments. Nonetheless, economic strains could arise. In China, for example, slow growth, high youth unemployment and disarray in property markets if not managed properly, could impact global business cycles. Similarly, should tolerance of high interest rates weaken, and unemployment rise significantly, the strong consumer demand that has supported the recovery could weaken.

•    War: The operational impacts of the Ukraine war and the Israel-Hamas war have been largely limited to re-routings due to airspace closures. On the cost side, the conflicts have pushed up oil prices which is impacting airlines globally. An unexpected peace in either or both cases would bring benefits to the industry, but any escalation could produce a radically different global economic scenario to which aviation would not be immune.

•    Supply Chains: Supply chain issues continue to impact 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.

Regional Roundup

The regions have recovered from the pandemic at different speeds. At the regional level, North America, Europe and the Middle East are expected to post net profits in 2023. Asia Pacific will join the group in 2024, but we still expect Latin America and Africa to be in the red in 2024.

North America

 2023 Net Profit (e)

(margin)               2024 Net Profit (f)

(margin)               2024 Demand (RPK)

Compared to 2023           2024 Demand (RPK)

Compared to 2019           2024 Capacity (ASK)

Compared to 2023           2024 Capacity (ASK)

Compared to 2019

$14.3 b

(4.2%)   $14.4 b

(4.0%)   +6.3%    +8.1%    +6.0%    +8.1%

North America remains the standout region in terms of financial performance. It was the first market to return to profitability in 2022 and built on this performance in 2023 by delivering efficiencies, particularly in high passenger load factors. Consumer spending has remained solid, despite cost-of-living pressures, and the demand for air travel remains robust and is expected to outpace growth in capacity into 2024.

 Europe

 2023 Net Profit (e)

(margin)               2024 Net Profit (f)

(margin)               2024 Demand (RPK)

Compared to 2023           2024 Demand (RPK)

Compared to 2019           2024 Capacity (ASK)

Compared to 2023           2024 Capacity (ASK)

Compared to 2019

$7.7 b

(3.5%)   $7.9 b

(3.3%)   +10.5% +7.0%    +8.8%    +7.0%

Europe is expected to end 2023 with a stronger than expected performance, notwithstanding the various capacity issues and supply side constraints. With strong demand for air travel expected to continue in 2024, net profit is expected to marginally strengthen. The key risks to the region’s performance relate to the tight labor market, and the war in Ukraine and in the Middle East.

 Asia Pacific

 2023 Net Profit (e)

(margin)               2024 Net Profit (f)

(margin)               2024 Demand (RPK)

Compared to 2023           2024 Demand (RPK)

Compared to 2019           2024 Capacity (ASK)

Compared to 2023           2024 Capacity (ASK)

Compared to 2019

-$0.1 b

(-0. 1%)                $1.1 b

(0.5%)   +13.5% -1.4%     +10.6% -1.4%

While some of the region’s main domestic markets (China, Australia and India) recovered quickly from the pandemic, international travel to/from the region was subdued as China only eliminated the last of its international travel restrictions in mid-2023. China’s international travel remains 40% below pre-pandemic levels. The region is expected to post a small loss in 2023, turning to a profit in 2024.

 Latin America

 2023 Net Profit (e)

(margin)               2024 Net Profit (f)

(margin)               2024 Demand (RPK)

Compared to 2023           2024 Demand (RPK)

Compared to 2019           2024 Capacity (ASK)

Compared to 2023           2024 Capacity (ASK)

Compared to 2019

-$0.6 b

(-1.5%) -$0.4 b

(-0.8%) +7.4%    +7.4%    +7.8%    +7.4%

While some markets are strong (Mexico for example), others are facing economic and social turmoil that is negatively impacting airline performance. With capacity growth expected to outpace demand growth in 2024, market conditions are expected to remain challenging. Overall, the Latin America region is expected to be in the red for both 2023 and 2024, although with reducing losses.

 Middle East

 2023 Net Profit (e)

(margin)               2024 Net Profit (f)

(margin)               2024 Demand (RPK)

Compared to 2023           2024 Demand (RPK)

Compared to 2019           2024 Capacity (ASK)

Compared to 2023           2024 Capacity (ASK)

Compared to 2019

$2.6 b

(4.3%)   $3.1 b

(4.8%)   +6.3%    +9.9%    +10.7% +9.9%

The Middle East is expected to deliver a strong financial performance in both 2023 and 2024. The Middle East carriers have been swift to rebuild their international networks and restore their super-connector hubs. To that end, capacity is expected to grow faster than demand in 2024; however, with more efficient fleets, net profit margin has a potential to slightly increase.

 Africa

2023 Net Profit (e)

(margin)               2024 Net Profit (f)

(margin)               2024 Demand (RPK)

Compared to 2023           2024 Demand (RPK)

Compared to 2019           2024 Capacity (ASK)

Compared to 2023           2024 Capacity (ASK)

Compared to 2019

-$0.5 b

(-3.4%) -$0.4 b

(-2.7%) +7.3%    +3.0%    +9.4%    +3.0%

African carriers are expected to generate losses in both 2023 and 2024. The continent remains a difficult market in which to operate an airline, with economic, infrastructure, and connectivity challenges impacting the industry performance. Despite these challenges, there is robust demand for air travel. Underpinned by this demand, the industry continues to reduce losses.

2023

Airline profitability for 2023 performed better than expected in IATA’s June outlook. 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). That translated 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.

The Traveler’s Viewpoint

Air travel continues to deliver value to consumers. A recent public opinion poll (14 countries, 6,500 respondents who have taken at least one trip in the last year) revealed that 97% of travellers expressed satisfaction with their travel. Moreover, 88% agreed that air travel makes their lives better and 80% agreed that air travel is good value for money.

Consumers can expect airfares to continue to track rising costs, particularly oil. IATA data, however, show that competition continues to drive price benefits for consumers. The average real return air fare in 2023 is expected to be $254 which is 20% lower than the average fare of $315 in 2019 (measured in constant 2018 dollars).

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:

•    89% agreed that air travel is a necessity for modern life

•    89% agreed that air connectivity is critical to the economy

•    88% said that air travel has a positive impact on societies, and

•    83% said that the global air transport network is a key contributor to the UN Sustainable Development Goals (SDGs)

Aviation remains committed to its goal of achieving net zero emissions by 2050. Travelers are expressing high levels of confidence in this commitment, with 84% believing it is the right goal, 79% saying that we will be able to fly sustainably, and 78% agreeing that aviation leaders are taking the climate challenge seriously.

SAF Volumes Growing but Still Missing Opportunities

Geneva- The International Air Transport Association (IATA) announced estimates for Sustainable Aviation Fuel (SAF) production.

•    In 2023, SAF volumes reached over 600 million liters (0.5Mt), double the 300 million liters (0.25 Mt) produced in 2022.

•    SAF accounted for 3% of all renewable fuels produced, with 97% of renewable fuel production going to other sectors.

•    In 2024 SAF production is expected to triple to 1.875 billion liters (1.5Mt), accounting for 0.53% of aviation’s fuel need, and 6% of renewable fuel capacity. The small percentage of SAF output as a proportion of overall renewable fuel is primarily due to the new capacity coming online in 2023 being allocated to other renewable fuels.

“The doubling of SAF production in 2023 was encouraging as is the expected tripling of production expected in 2024. But even with that impressive growth, SAF as a portion of all renewable fuel production will only grow from 3% this year to 6% in 2024. This allocation limits SAF supply and keeps prices high. Aviation needs between 25% and 30% of renewable fuel production capacity for SAF. At those levels aviation will be on the trajectory needed to reach net zero carbon emissions by 2050. Until such levels are reached, we will continue missing huge opportunities to advance aviation’s decarbonization. It is government policy that will make the difference. Governments must prioritize policies to incentivize the scaling-up of SAF production and to diversify feedstocks with those available locally,” said Willie Walsh, IATA’s Director General.

CAAF/3 outcome

The Third Conference on Aviation Alternative Fuels (CAAF/3) hosted by the International Civil Aviation Organization (ICAO) agreed a global framework to promote SAF production in all geographies for fuels used in international aviation to be 5% less carbon intensive by 2030. To reach this level, about 17.5 billion liters (14Mt) of SAF need to be produced.

“Governments want aviation to be net zero by 2050. Having set an interim target in the CAAF process they now need to deliver policy measures that can achieve the needed exponential increase in SAF production,” said Walsh.

•    Demand is not the issue: Every drop of SAF produced has been bought and used. In fact, SAF added $756 million to a record high fuel bill in 2023. At least 43 airlines have already committed to use some 16.25 billion liters (13Mt ) of SAF in 2030, with more agreements being announced regularly. •    Unlocking supply to meet demand is the challenge that needs to be solved: Projections are for over 78 billion liters (63Mt) of renewable fuels to be produced in 2029. Governments must set a policy framework that incentivizes renewable fuel producers to allocate 25-30% of their output to SAF to meet the CAAF/3 ambition, existing regional and national policies as well as airline commitments.

IATA Expanding Operational Data Analytics Capabilities

Geneva- The International Air Transport Association (IATA) announced that insights from enhancing the analytical capabilities of the IATA Global Aviation Data Management (GADM) program are powering informed decisions to improve safety, operational efficiency and sustainability. The new capabilities take advantage of advancements in big data, machine learning and artificial intelligence.

GADM’s data comes from several sources, including the Incident Data Exchange (IDX)  and the Flight Data eXchange (FDX) programs. The latter now comprises data from 15 million flights performed by 7,500 aircraft.  The FDX data captured from each flight monitors hundreds of parameters per second, thus making GADM the most authoritative and comprehensive collection of global aviation operational data in the world. Currently 198 airlines contribute data to GADM, this database will grow daily as additional data is collected.

“Enhancing GADM’s capabilities is contributing to data-driven insights and improvements for aviation safety, operational efficiency and sustainability. GADM is the industry’s most comprehensive database. By applying better analytical tools, we are turbocharging its ability to inform critical business decisions. Individual users will be able to better compare their performance to industry benchmarks when making critical business decisions. And, at the industry level, we have been able to more precisely pinpoint operational trends, as well as emerging challenges and opportunities,” said Nick Careen, IATA Senior Vice President, Operations, Safety and Security.

Industry-Leading Insights

Examples of insights gained through GADM’s enhanced capabilities include:

•    Identifying emerging safety risks:

Through extensive aggregation of GADM’s data, IATA is able to identify emerging safety trends, whether at specific airports, regions, or for certain types of operation. Such analysis will be especially beneficial for airlines exploring new destinations, and for regulators formulating aviation safety strategies. Using GADM data, IATA recently identified GPS signal loss in specific geographies as an emerging safety risk, for example.

•    Fuel Efficiency Measurement:

Fuel currently represents nearly a third of the operational expense of an airline. Since 2005, IATA has worked with airlines to find fuel saving opportunities and identified average potential fuels savings of 4.4% across flight dispatch, ground operations, and flight operations. Moving forward, IATA will use GADM operational data to enhance the analysis done by its fuel experts and provide industry benchmarks related to fuel efficiency.

•    Aircraft Emissions Calculations:

Analyzing GADM data is leading to more granular measurement of aircraft fuel burn and, consequently, tracking of CO2 emissions. With analysis of hundreds of data parameters at every second of flight, it is also possible to identify the precise impact of fuel saving operational measures. All of these will help the industry as it moves towards net zero carbon emissions by 2050.

•    Predicting Aircraft Performance:

Predictive analytics in aircraft performance, particularly in fuel consumption, are essential for strategic decisions. IATA’s advanced deep learning models offer high-accuracy predictions, helping inform decisions on aircraft purchases and strategic network planning.

Focusing on Data

As the trade association for the global airline industry, IATA has long been a trusted partner of industry data, upholding strict governance rules agreed with the airlines. IATA’s business intelligence services, including the flagship Direct Data Solutions (DDS) and AirportIS products, are recognized for the quality and comprehensiveness that they provide for market analysis. 

On the operational side, data from IATA’s its flagship global safety audit programs— IATA Operational Safety Audit (IOSA) and IATA Safety Audit for Ground Operations (ISAGO)— are included in GADM along with FDX and IDX data and much more. 

“Data is at the center of more and more of IATA’s activities as the global trade association for airlines. It’s not about storing it for posterity, but rather using data to provide better analysis, and more importantly, solutions to industry issues. Data analysis is a part of our core business and a great opportunity to make aviation stronger,” said Kim Macaulay, IATA Chief Information and Data Officer.

To support its increased focus on data, IATA is staffing-up a newly established a division responsible for data management, strengthening the GADM team and expanding its team of data scientists significantly. The aim is to improve the analytics capabilities offered by IATA to help airlines in their decision-making processes. IATA Consulting has also geared-up to help clients achieve their business goals using GADM and other IATA data collections and expertise.