Airlines make less profit per passenger
Published: Tuesday, Dec 10th 2024, 12:10
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According to a forecast by their umbrella organization (IATA), airlines are likely to make an average net profit of just 6.4 dollars per passenger this year. This is significantly less than last year (7.9 dollars), reports IATA in Geneva.
Passengers will have to adjust to higher ticket prices as costs continue to rise, said IATA Chief Economist Marie Owens Thomsen. According to the forecast, net profit per passenger is expected to rise to a global average of 7 dollars.
IATA is expecting a record for 2025: passenger numbers are likely to exceed five billion for the first time. It expects 5.2 billion passengers, 6.7 percent more than this year.
In Europe, the net profit per passenger is higher than the global average: IATA states 8.2 dollars for this year, behind the USA with 10.3 and the Middle East with 23.1 dollars. This profit is expected to rise everywhere next year, in Europe to 9.2 dollars per passenger.
Overall, the association anticipates higher profits this year than expected twelve months ago and a further increase in 2025. The net profit forecast for this year is 31.5 billion dollars and 36.6 billion dollars for 2025.
Inflation and growing competition
On the one hand, the industry has price pressure from above because it has little influence on many prices: for example, airport charges and air traffic control services, but also from suppliers such as engine and machine manufacturers, some of whom exploit their monopoly position and dictate high prices, said Owens Thomsen.
The strong competition creates pressure from below: every passenger can compare prices at any time and on any route, which makes price increases difficult.
Around 340 airlines from more than 120 countries are organized in IATA, including Lufthansa. They transport around 80 percent of global air traffic, passengers and air freight.
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