TP Aerospace
AviTrader sponsorship ad

IBA predicts a 60% surge in airline profitability for 2024

IBA forecasts a 60% increase in airline profitability in 2024
IBA forecasts a 60% increase in airline profitability in 2024 © Shutterstock

Airline industry net profit per passenger is predicted to increase by almost 60% between 2023 and 2024, according to data recently revealed by IBA, a leading aviation market intelligence and advisory company.

IBA’s experts forecast that the net profit per passenger will rise from US$6.40 in 2023 to US$10.20 in 2024 – an increase of 59.4%. This comes as airlines continue to increase capacity in 2024, with Q1 ASKs up 18% year on year from Q1 2023 according to data from IBA Insight.

In an historic 2023, airlines across Europe and Asia-Pacific dominated the aircraft order books, with each region accounting for around 1,000 new commitments. This propelled total net orders to a record 3,368 aircraft – over double the figure for 2022 – and with minimal order cancellations.

Aircraft manufacturing rates have been increasing since the global pandemic for both wide-body and narrow-body types, but it will still be a challenge to meet future targets. At the end of 2023, the two major OEMs were barely 60% of the way to reaching their mid-decade narrow-body targets, and less than 50% of the way for the wide-bodies. This ultimately establishes that the number of missing new build aircraft from the system will exceed 4,100 units by 2027, the impact of which will be felt throughout the lifetimes of these vintage aircraft.

IBA forecasts that passenger numbers are set to increase in the coming years, with 2024 traffic projected to outpace 2019 by 4%, highlighting an overall recovery in traffic to pre-pandemic levels. This upward trend shows no signs of slowing down, with 12 trillion RPKs predicted by 2030, compared to 8.66 billion in 2019.

Aircraft storage is predicted to improve to 2019 levels once new technology aircraft re-enter service. 2019 saw 12% of aircraft in storage, which rose to over 70% in 2020 but dropped to 19% by the end of 2023. There are currently 712 new technology aircraft in storage. 488 of these are from the A320neo family, with 83% of these powered by GTF engines. Aircraft currently grounded are either between leases, awaiting maintenance action, or set for conversion and retirement.

In 2023, the aviation industry experienced a more favourable year than anticipated. Despite earlier predictions, a global recession was averted. Unit costs saw notable improvement throughout the year and revenue performance remained strong, driven by substantial volume growth.

It is estimated that airlines from all regions improved their net profitability in 2023, with a global average net profit margin of 6% compared to 0% the year before. The Middle East was pre-eminent with an average 13% margin with North America at the other end of the scale at 4%. In the year ahead, however, net profit improvement is expected to slow, with Asia-Pacific being the only region forecast to significantly increase margins – from 5% in 2023 to 8% in 2024.

Airlines in Europe, the Middle East, and Latin America are using profitability to lower debts, which spiked in 2020 but have steadily fallen in the following years. While global debts have fallen from a base level of 100% in 2019 to 97% in 2023, North America’s airline debt levels remain high, sitting at 150% in 2023.

Airlines are continuing to expand capacity in 2024, demonstrating the continuing industry recovery since 2020. First-quarter global ASKs climbed 18% year-over-year, with Europe and the Middle East both increasing by 11%, Africa by 28%, Asia Pacific by 27%, and North America by 7%.

Despite overall airline performance improving slightly with IBA’s Global Weighted Average increasing to 80% in 2024 from 79% in 2023, several airlines remain in IBA’s risk zone for performance and profit. This improved airline financial position has led to a decrease in airline failures compared to 2020 levels (45 carriers), but a slight increase year on year from 19 airlines in 2022 to 23 in 2023.

The aviation transaction landscape in 2024 is projected to increase year on year to close to 4,000 aircraft transactions, compared to less than 3,500 in 2023. This forecast growth is fuelled by both lessor M&A and the increased trading of leased aircraft. IBA expects to see operators continuing to extend leases and purchase aircraft at the point of lease ends, potentially impacting the number of aircraft available in the secondary market.

Value and lease rates are expected to continue to rise strongly in 2024. The 737 MAX 8 and A320neo are now poised on equal ground, with IBA forecasting new aircraft lease rates to reach US$410,000 per month for both models by July 2024.

Meanwhile, the market values of new wide-body aircraft have reached 2019 levels, with further growth expected in 2024, spearheaded by the A350-900 and A330neo which are forecast by IBA to grow by 5.8% and 5.3% respectively in the 12 months to July 2024.

Mid-life narrow-body values and lease rates rose sharply in 2023, with further gains forecast in 2024. The market value of the A321-200 is forecast to increase by 25.5% in the 12 months to July 2024 and its lease rate is to grow 31.1% over the same period.

Mid-life wide-body market values are expected to double from recent lows with the A330-300 value forecast to grow by 107.5% in the 12 months to July 2024, while lease rates are also posting a strong recovery and are forecast to exceed 2019 levels by mid-2024.

Wednesday February 21, 2024
AirFish WIG craft
ST Engineering has announced that its joint venture, ST Engineering AirX, has signed a letter of intent (LOI) with Eurasia Mobility Solutions (EMS) for the purchase of up to ten AirFish wing-in-ground (WIG) craft, with an option for an additional ten. The agre... Read More »
Wednesday February 21, 2024
Satair, an Airbus Services company and Telair, a supplier of aerospace cargo loading solutions, have signed a multi-year agreement, extending their global exclusive distribution rights for commercial wide- and narrow-body aircraft and military applications. Th... Read More »
Wednesday February 21, 2024
Image of Airbus aircraft in STARLUX livery
STARLUX Airlines of Taiwan has placed a firm order for five all-new A350F freighters and three more A330neo wide-body aircraft. The agreement was signed at the Singapore Airshow by KW Chang, Chairman of STARLUX Airlines and Christian Scherer, CEO of the Commer... Read More »
Wednesday February 21, 2024
HoneywellFDR-CVR section recorder
AMETEK Singapore PTE has been named a Honeywell authorised repair centre (ARC) for solid state flight data recorders and cockpit voice recorders for Airbus A320/A330/A340 and Boeing 737NG/737Max/777 aircraft. The five-year agreement covers full test and repair... Read More »
Wednesday February 21, 2024
Qantas has announced two new board members, including a new Chairman, as part of its ongoing renewal. John Mullen will join the Qantas Board from July 1, 2024, as Non-Executive Director and Chairman Elect and will assume the role of Chairman ahead of the compa... Read More »
Wednesday February 21, 2024
Displaying the MoU are representatives from Fokker Services Asia and Embraer
Fokker Services Asia, a subsidiary of Fokker Services Group, is on track to become an authorized service centre for Embraer’s first-generation E-Jets family, as per the memorandum of understanding (MoU) announced on February 20. The agreement positions Fokke... Read More »
Wednesday February 21, 2024
A Breeze Airways A220 in Mobile, Alabama, U.S.A.
Breeze Airways (Breeze) has disclosed an order for ten additional A220-300 aircraft, bringing the airline’s total firm order for the aircraft type to 90, making Breeze the third-largest customer worldwide for the A220. “Thanks to its world class performanc... Read More »
Tuesday February 20, 2024
Royal Brunei Airlines has ordered four 787 Dreamliners to revitalise its wide-body fleet
Boeing has announced that Royal Brunei Airlines has ordered four 787 Dreamliners to revitalise its wide-body fleet. The selection of the 787-9 aligns with Royal Brunei Airlines’ focus on long-term growth, sustainability and enhancing passenger comfort. S... Read More »
Tuesday February 20, 2024
Magnetic Group hangar in Tallinn, Estonia
Magnetic Group, a prominent MRO service provider based in Tallinn, Estonia, has chosen to integrate AMOS as its new maintenance and engineering solution from Swiss AviationSoftware (Swiss-AS). This new partnership reflects the company’s commitment to adv... Read More »
Tuesday February 20, 2024
Contract signing between CALC and CFM International at the Singapore Airshow
China Aircraft Leasing Group Holdings (CALC) has confirmed its commitment to fleet efficiency and sustainability by signing an agreement during the Singapore Airshow 2024 for the purchase of 40 LEAP-1A engines from CFM International. This strategic move aligns... Read More »
Tuesday February 20, 2024
Representatives from Honeywell and ST Engineering at the signing ceremony
ST Engineering’s Commercial Aerospace business is extending its partnership with Honeywell for mechanical, avionics and LEAP engine components service and repair as a member of the Honeywell Channel Partner network. The renewed partnership underscores ST... Read More »
Tuesday February 20, 2024
SIA has selected Trax's eMRO and TraxDoc solutions
Trax, a global provider of digital aviation maintenance and engineering software, has announced a strategic partnership with Singapore Airlines (SIA) for the implementation of its eMRO and TraxDoc solutions. This collaboration aims to support SIA’s advan... Read More »
Tuesday February 20, 2024
Eve has signed supply agreements with Aciturri and Crouzet for eVTOL components
Eve Air Mobility (Eve) has announced two new suppliers for its electric vertical take-off and landing (eVTOL) aircraft. Aciturri will oversee the development and manufacturing of the wing skins, spars, and leading and trailing edges of the wing. Meanwhile, Cro... Read More »
Tuesday February 20, 2024
RB211-535 © StandardAero
StandardAero has achieved certification approval from the Civil Aviation Administration of China (CAAC) for its MRO services on Rolls-Royce RB211-535 turbofan engines. This milestone empowers StandardAero to deliver RB211-535 MRO support to Chinese operators o... Read More »
Monday February 19, 2024
ATR 72-600 aircraft in Silk Avia livery © ATR
Regional aircraft lessor Nordic Aviation Capital (NAC) and ATR, the regional aircraft manufacturer, have jointly announced the successful delivery of the first new ATR 72-600 to Uzbekistan’s airline Silk Avia. This historic milestone marks the commenceme... Read More »
Monday February 19, 2024
Pratt & Whitney (P&W)
Pratt & Whitney (P&W) has officially opened a 48,000 ft² expansion of its Singapore-based engine centre, Eagle Services Asia (ESA). The facility is set to increase its GTF (Geared Turbofan) capacity by two-thirds this year. “This expansion demon... Read More »
Monday February 19, 2024
BAE Systems has acquired Ball Aerospace which will operate under the name Space & Mission Systems © Shutterstock
Following regulatory approvals for the acquisition of Ball Aerospace, BAE Systems has now successfully concluded the acquisition of Ball Aerospace from Ball Corporation. The transaction has been finalised at a purchase price of US$5.5 billion (approximately £... Read More »
Monday February 19, 2024
Representatives of Embraer and CAE at the unveiling of the new CAE 7000XR Series FFS in Singapore © Embraer
Embraer and CAE have officially opened the first E-Jets E2 full-flight simulator (FFS) in the Asia Pacific (APAC) region. This state-of-the-art simulator, located at the Singapore-CAE Flight Training Centre near Changi Airport, is part of the E-Jets E2 trainin... Read More »
Monday February 19, 2024
COMAC’s C919 made its international debut with a fly-by at the Singapore Airshow © AirTeamImages
China’s contender against Airbus and Boeing passenger jets, the narrow-body C919, engineered by the Commercial Aircraft Corporation of China (COMAC), has showcased its capabilities beyond Chinese borders. The aircraft made its international debut with a ... Read More »
Monday February 19, 2024
Travelport and Air Canada have signed a new content distribution agreement
Air Canada has demonstrated robust financial performance in the fiscal year 2023 compared to 2022, with notable improvements across key metrics. The airline’s operating revenues reached CA$21.833 billion, marking a significant 32% increase driven by a 20... Read More »
AviTrader mro magazine


Aviation Media Pack

Learn more on how AviTrader can expand your market

Please contact

Tamar Jorssen
Vice President Sales & Marketing
[email protected]
Mailing Address
AviTrader Publications Corp.
Suite 305, South Tower
5811 Cooney Road
Richmond, BC V6X 3M1

Subscribe to the most widely accepted news source in the aviation industry!

Free Daily, Weekly and MRO Publications delivered to your Inbox!
News Alerts, Editorials, Marketplace, Executive Interviews +more

Select publications:

*we respect your privacy and AviTrader will not share your email address to any 3rd Parties.

Scroll to Top