11:00 - 23.02.2024

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February 23, Fineko/abc.az. U.S. and European airlines will aim to boost profits again this year with higher ticket prices as they try to squeeze what they can from the post-COVID travel boom and mitigate higher costs amid persistent plane shortages, investors and executives say.

ABC.AZ reports that major carriers are straining to lay on more flights to meet demand, but are struggling due to delays in new plane deliveries from Airbus and Boeing.

Tight supplies, in turn, are keeping air fares high, allowing carriers to pass on higher jet fuel, labour and maintenance costs.

According to IATA, airlines will earn an average of $5.44 per passenger. According to IATA forecasts, revenues will grow in 2024, albeit at a slower pace, by about 1.8%.

That has sent average revenues per passenger - known in the industry as yields and a proxy for airline pricing power - to 6.2% last year, its fourth straight year of growth, according to data from global trade body IATA.

European airlines' yields this summer - the busiest time of year - will exceed last year's levels, hitting as high as 8.5%, and increase even more in 2025 as travel demand continues and plane delivery delays persist, according to Bernstein forecasts.

According to analysts, demand will have grown about 15-20% this summer since 2019, while capacity has barely budged.

"Higher fares this summer will keep driving profits. Airlines will make more money because customers are still willing to pay more," said Jamie Lindsay, an airline investor at Artemis Investment.

Interviews with half a dozen analysts, executives and investors and fare data show airlines' resilience as they recover from the pandemic when planes were grounded, borders were shut and they took on billions in debt to stay afloat.

The IATA has raised its forecast for the net profit of global airlines in 2023 to $23.3 billion. In 2024, according to IATA's expectations, the total net profit of the industry will reach $25.7 billion with revenue of $964 billion, expenses of $914 billion and profitability of 2.7%. Passenger traffic next year is expected to reach 4.7 billion people, which exceeds the figures of 2019 (4.54 billion people) and may become a historical maximum.