Skip to content Skip to Search
Skip navigation

Airline margins ‘wafer thin’, says IATA’s Willie Walsh

Airlines profits coffee Emirates Reuters/Ahmed Jadallah
Airlines make just $6 profit on every passenger, enough to buy a single espresso at the JW Marriott Marquis Hotel in Dubai, according to IATA chief Willie Walsh
  • Revenues in 2024 ‘close to $1trn’
  • But expenses will be $936bn
  • Net profit margin just 3%

The profit global airlines make per passenger is only enough to buy a single espresso in a Dubai hotel coffee shop, according to Willie Walsh, the director general of the International Air Travel Association (IATA).

Global airlines are expected to make $30.5 billion in profits this year, but margins remain “wafer thin”, Walsh told the 80th annual general meeting of IATA in Dubai.

Walsh said that industry revenues will be close to $1 trillion in 2024, but expenses will also increase to a record high of $936 billion, representing a net margin of just over 3 percent.



“Considering where we were just a few years ago, it’s a major achievement,” Walsh said.

He said that the real cost of air travel had fallen by a third in the past decade and that airlines were making just over $6 profit on every passenger.

“That can buy you a single espresso in this hotel’s coffee shop,” Walsh said. The meeting is being held in the JW Marriott Marquis Hotel in Dubai.

Sticking with the coffee theme, Walsh said Starbucks enjoys a net margin of 11.5 percent.

“The best our industry has ever achieved was 5 percent net margin in 2015 and 2017,” he said.

This year airlines will fly nearly 5 billion people, over 22,000 routes, involving 39 million flights. Some 62 million tons of cargo will be carried, making possible $8.3 trillion in trade, Walsh said.

“Governments who look to our industry for new tax revenues need to understand that our margins are wafer thin and we rarely earn our cost of capital,” he said.

“This year airlines on average will earn a 5.7 percent return on investor capital, well below the average 9 percent cost of capital.”

Middle East faring best

Middle East airlines fared much better than the global average, with a net profit margin of 4.9 percent ($12.70 per passenger) in 2023, which is expected to increase to 5.3 percent this year, according to IATA forecasts released this week.

Airlines in the Middle East reported a 14.2 percent year-on-year increase in demand in April, IATA statistics show, measured in revenue passenger kilometres.

Capacity, measured in available seat kilometres, increased 9.9 percent year-on-year and the load factor increased 3 percentage points compared to April 2023, to 79.3 percent.

Total global demand was up 11 percent. Total capacity was up 9.6 percent year on  year. The April load factor was 82.4 percent.

Latest articles

More than 24 million people visited the World Expo event at Expo City Dubai between October 2021 and March 2022

Construction begins at Expo City Dubai site

Construction has begun on the first residential properties at Expo City Dubai, part of a mixed-use master plan to repurpose the legacy site after the world fair came to a close two years ago. Master developer Expo City Dubai announced last week that it has awarded four key contracts for its Mangrove Residences. UAE-based USF […]

Saudi housing costs rose nearly 9% year on year in May

Saudi housing costs rise but inflation remains steady

Housing costs in Saudi Arabia rose nearly 9 percent year on year in May, but it was not enough to push overall inflation in the kingdom over 2 percent. The latest data from the General Authority for Statistics showed the annual inflation rate in Saudi Arabia was 1.6 percent in May, having remained at this […]

OTB Group has a presence in Dubai with its Maison Margiela store in the Dubai Mall

Chalhoub Group in venture with Italian luxury brand

Luxury distributor Chalhoub Group has entered into a joint venture with Italian fashion conglomerate OTB Group to expand the brand’s footprint in the Gulf. OTB (which stands for Only The Brave) owns the Diesel, Jil Sander, Maison Margiela, Marni and Viktor&Rolf brands, the Staff International and Brave Kid companies, and holds a stake in the […]

Arid conditions brought about by the drought in Morocco are affecting the cost of sheep

Drought pushes up sheep price for Eid in Morocco

The price for a sheep in Morocco for the annual sacrifice at Eid al-Adha has increased on average at 10 times the 2.2 percent rate of inflation. A medium-sized female sheep costs MAD4000 ($400) as opposed to MAD3000 last year. This puts it out of range for many families in the country where a high […]