On average, airlines will retain just $5.45 for every passenger carried by them and the amount is just enough to buy a basic grand latte at a London Starbucks, IATA chief Willie Walsh said on Wednesday as he emphasised that the profit of airlines should be put in proper perspective.
The International Air Transport Association (IATA) has projected the airline industry to rake in profits of $25.7 billion in 2024 and $23.3 billion this year.
Walsh, the Director General of IATA, said that considering the major losses of recent years, the $25.7 billion net profit expected in 2024 is a tribute to aviation's resilience and that the speed of the recovery has been extraordinary, but it also appears that the pandemic has cost aviation about four years of growth. "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," Walsh said in a release.
Speaking at a session here, Walsh said that a lot of supply chain issues have impacted the capacity plans of airlines and also mentioned that the problem with GTF engines was very disappointing.
These engines are manufactured by Pratt & Whitney (P&W), and many of them are expected to be taken out for service next year due to certain issues.
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