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Airlines ETF (JETS) to Surge in 2024 on Solid Travel Forecast?
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The International Air Transport Association (IATA) anticipates a solid surge in traveler numbers and revenues for airlines in 2024. The sector is projected to achieve a net profit of $25.7 billion, with a 2.7% net profit margin. This forecast marks a modest improvement from the revised estimate of $23.3 billion net profit and a 2.6% margin for the current year, as quoted on CNBC.
US Global Jets ETF (JETS - Free Report) should gain from this upbeat forecast. The underlying U.S. Global Jets Index tracks the performance of Airline Companies across the globe with an emphasis on domestic passenger airlines. The fund charges 60 bps in fees (read: 5 ETF Areas At One-Month High to Start December).
Record Revenues and Traveler Numbers Expected
In 2024, the airline industry is set to witness a 7.6% annual increase in total revenues, reaching a historic high of $964 billion. The number of travelers is expected to climb to approximately 4.7 billion, surpassing the pre-pandemic figure of 4.5 billion in 2019.
Resilience in the Face of Pandemic Challenges
The airline sector, particularly in North America, the Middle East, and Europe, has largely recovered from the severe impacts of the Covid-19 pandemic. Willie Walsh, IATA Director General, attributes the anticipated stabilization of profits in 2024 to the aviation industry's remarkable resilience.
Post-Pandemic Consumer Demand Recovery
The resurgence of consumer demand post-pandemic is evident in the latest full-year results of the Anglo-German travel group Tui, which reported a 139% increase in underlying earnings. European travel giant Tui's optimistic forecast for a 25% rise in EBIT in 2024 has positively influenced its share price.
Industry Profit Margins and Future Prospects
Having said all, we would like to note that higher interest rates are negatives for airlines’ financials. Walsh emphasizes the need for a realistic perspective on the industry's profit outlook. With a net profit margin of 2.7%, the airline industry lags behind other sectors in terms of investor returns. On average, airlines are expected to retain just $5.45 per passenger, a figure insufficient to build a resilient future for this critical global industry.
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)
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Airlines ETF (JETS) to Surge in 2024 on Solid Travel Forecast?
The International Air Transport Association (IATA) anticipates a solid surge in traveler numbers and revenues for airlines in 2024. The sector is projected to achieve a net profit of $25.7 billion, with a 2.7% net profit margin. This forecast marks a modest improvement from the revised estimate of $23.3 billion net profit and a 2.6% margin for the current year, as quoted on CNBC.
US Global Jets ETF (JETS - Free Report) should gain from this upbeat forecast. The underlying U.S. Global Jets Index tracks the performance of Airline Companies across the globe with an emphasis on domestic passenger airlines. The fund charges 60 bps in fees (read: 5 ETF Areas At One-Month High to Start December).
Record Revenues and Traveler Numbers Expected
In 2024, the airline industry is set to witness a 7.6% annual increase in total revenues, reaching a historic high of $964 billion. The number of travelers is expected to climb to approximately 4.7 billion, surpassing the pre-pandemic figure of 4.5 billion in 2019.
Resilience in the Face of Pandemic Challenges
The airline sector, particularly in North America, the Middle East, and Europe, has largely recovered from the severe impacts of the Covid-19 pandemic. Willie Walsh, IATA Director General, attributes the anticipated stabilization of profits in 2024 to the aviation industry's remarkable resilience.
Post-Pandemic Consumer Demand Recovery
The resurgence of consumer demand post-pandemic is evident in the latest full-year results of the Anglo-German travel group Tui, which reported a 139% increase in underlying earnings. European travel giant Tui's optimistic forecast for a 25% rise in EBIT in 2024 has positively influenced its share price.
Industry Profit Margins and Future Prospects
Having said all, we would like to note that higher interest rates are negatives for airlines’ financials. Walsh emphasizes the need for a realistic perspective on the industry's profit outlook. With a net profit margin of 2.7%, the airline industry lags behind other sectors in terms of investor returns. On average, airlines are expected to retain just $5.45 per passenger, a figure insufficient to build a resilient future for this critical global industry.
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)