QuarterlyAirTransportChartbookIATASustainability&EconomicsQ42023TableofContentsTableofContents...........................................................................................................................................................................2Glossary.............................................................................................................................................................................................3TableofCharts................................................................................................................................................................................4I.TheBusinessCycle..................................................................................................................................................................6II.EnergyTransition......................................................................................................................................................................8ConventionalAviationFuel..............................................................................................................................................................8SustainableAviationFuel.................................................................................................................................................................8III.PassengerandCargoTraffic..............................................................................................................................................10PassengerTraffic..............................................................................................................................................................................10AirConnectivity...........................................................................................................................................................................12CargoTraffic.......................................................................................................................................................................................14IV.AirlineFinancialPerformance............................................................................................................................................18Revenue................................................................................................................................................................................................18Expenses..............................................................................................................................................................................................18Capitalmarkets..................................................................................................................................................................................18V.RegionalOutlook.....................................................................................................................................................................20Africa.....................................................................................................................................................................................................20Americas..............................................................................................................................................................................................22AsiaPacific..........................................................................................................................................................................................24Europe...................................................................................................................................................................................................26MiddleEast..........................................................................................................................................................................................28VI.Appendix....................................................................................................................................................................................30Notetoreaders:TheAirlineFinancialPerformancesectionisincludedintheQuarterlyAirTransportChartbookforQ2andQ4ofeachyear.ItisexcludedfromtheQ1andQ3reportsastheairlinefinancialperformancereviewandforecastarereleasedalongsidetheJuneandDecemberGlobalOutlookreports,respectively.2QuarterlyChartbookQ42023GlossaryACTKs–AvailableCargoTonne-KilometersASKs–AvailableSeat-KilometersATJ–Alcohol-to-JetATKs–AvailableTonne-KilometersBBL–BarrelBLF–BreakevenLoadFactorCLF–CargoLoadFactorCORSIA–carbonoffsettingandreductionschemeforinternationalaviationCTKs–CargoTonne-KilometersEBIT–EarningsbeforeinterestandtaxesFT–Fischer-TropschGDP–GrossDomesticProductHEFA-Hydro-processedEstersandFattyAcidsLF–LoadFactorMoM–Month-on-monthMoUs–MemorandaofunderstandingOPEC–OrganizationofthePetroleumExportingCountriesO-D–Origin-DestinationPLF–PassengerLoadFactorPMI–PurchasingManagers'IndexPtL–Power-to-LiquidPPP–Purchasingpowerparityppt-PercentagepointsRPKs–RevenuePassenger-KilometersRTKs–RevenueTonne-KilometersSA–SeasonallyadjustedSAF–SustainableAviationFuelQoQ–Quarter-on-quarterUSD–UnitedStatesDollarYoY–Year-on-year3QuarterlyChartbookQ42023TableofChartsChart1:Globalgrossdomesticproduct(constantUSD),annual%change.....................................................................7Chart2:ContributionfromlargeeconomiestoworldGDPgrowthin%............................................................................7Chart3:Unemployment,totalbycountrygroup,%oftotallaborforce............................................................................7Chart4:Inflationinmajoreconomiesin%......................................................................................................................................7Chart5:Globaleconomicpolicyuncertaintyindex.....................................................................................................................7Chart6:RealEffectiveExchangeRateIndex,Broad...................................................................................................................7Chart7:Jetfuelprice,USD/bbl............................................................................................................................................................9Chart8:Jetfuelcrackagainstcrudeoil,USD/bbl.......................................................................................................................9Chart9:Quarterlyjetfuelpricesin2023byregion,USD/bbl.................................................................................................9Chart10:NumberofSAFofftakeagreements,asofDec2023..............................................................................................9Chart11:Cumulativerenewablefuelcapacityinmilliontonnes...........................................................................................9Chart12:Totalrenewablefuelcapacityby2029,%sharebypathway..............................................................................9Chart13:IndustrymonthlyRPKsinbillions..................................................................................................................................11Chart14:IndustrymonthlyASKsinbillions..................................................................................................................................11Chart15:Passengerloadfactor,%shareofASK......................................................................................................................11Chart16:DomesticRPKsbycountrymarket,%changeversusthesamequarterin2019.....................................11Chart17:InternationalRPKsbyairlineregionofregistration,%shareofthesameperiodin2019...................11Chart18:InternationalRPKsbycabinclass,%changevsthesameperiodin2019(Q4)........................................11Chart19:IATAGlobalAirConnectivityIndex,Jan2020-Dec2023....................................................................................13Chart20:Globalairportpairs,Jan2020-Dec2023....................................................................................................................13Chart21:RecoveryininternationalconnectivitybyregionthroughDec2023............................................................13Chart22:IndustryquarterlyCTKsinbillions................................................................................................................................16Chart23:InternationalCTKgrowthbyairlineregionofregistration,annual%change...........................................16Chart24:IndustryquarterlyACTKsinbillions.............................................................................................................................16Chart25:Year-to-datequarterlyindustryACTKsinbillions.................................................................................................16Chart26:GrowthofinternationalACTKsbytype,annual%change.................................................................................16Chart27:InternationalACTKsbytypeinbillions.......................................................................................................................16Chart28:Cargoloadfactorsinmajorrouteareas,%shareofACTKs.............................................................................17Chart29:GlobalmanufacturingPMIsandindustryCTKgrowth,annual%change....................................................17Chart30:Growthininventory-to-salesratio(invertedontheaxis)andindustryCTKs,annual%change......17Chart31:GrowthinglobalgoodstradeandindustryCTKs,annual%change.............................................................17Chart32:AirlineindustrynetprofitandEBITmargin...............................................................................................................19Chart33:Regionalairlinesprofitability,USDbillion..................................................................................................................19Chart34:Globalairlinesrevenue,USDbillion..............................................................................................................................19Chart35:GlobalAirlinesPriceReturnIndexvsMSCIACWI,Dec19=100........................................................................19Chart36:RelativeRegionalAirlinePriceIndexperformance,Jan23=100......................................................................19Chart37:GrowthinRPKsbyairlineregionofregistration,Africa......................................................................................21Chart38:GrowthininternationalRPKsbyairlineregionofregistration,Africa..........................................................21Chart39:GrowthinCTKsbyairlineregionofregistration,Africa......................................................................................21Chart40:Ticketsalesbyregion(7-daymovingaverage),Africa........................................................................................21Chart41:Passengertraffic(O-D)growthbycountryinQ42023,Africa.........................................................................21Chart42:Aircraftdeliveriesin2015-2024(scheduled),Africa.............................................................................................21Chart43:GrowthinRPKsbyairlineregionofregistration,Americas...............................................................................23Chart44:GrowthininternationalRPKsbyairlineregionofregistration,Americas...................................................23Chart45:GrowthinCTKsbyairlineregionofregistration,Americas...............................................................................23Chart46:Ticketsalesbyregion(7-daymovingaverage),Americas.................................................................................23Chart47:Passengertraffic(O-D)growthbycountryinQ42023,Americas..................................................................23Chart48:Aircraftdeliveriesin2015-2024(scheduled),Americas.....................................................................................23Chart49:GrowthinRPKsbyairlineregionofregistration,AsiaPacific...........................................................................25Chart50:GrowthininternationalRPKsbyairlineregionofregistration,AsiaPacific...............................................25Chart51:GrowthinCTKsbyairlineregionofregistration,AsiaPacific..........................................................................25Chart52:Ticketsalesbyregion(7-daymovingaverage),AsiaPacific............................................................................254QuarterlyChartbookQ42023Chart53:Passengertraffic(O-D)growthbycountryinQ42023,AsiaPacific..............................................................25Chart54:Aircraftdeliveriesin2015-2024(scheduled),AsiaPacific.................................................................................25Chart55:GrowthinRPKsbyairlineregionofregistration,Europe....................................................................................27Chart56:GrowthininternationalRPKsbyairlineregionofregistration,Europe........................................................27Chart57:GrowthinCTKsbyairlineregionofregistration,Europe...................................................................................27Chart58:Ticketsalesbyregion(7-daymovingaverage),Europe......................................................................................27Chart59:Passengertraffic(O-D)growthbycountryinQ42023,Europe.......................................................................27Chart60:Aircraftdeliveriesin2015-2024(scheduled),Europe..........................................................................................27Chart61:GrowthinRPKsbyairlineregionofregistration,MiddleEast...........................................................................29Chart62:GrowthininternationalRPKsbyairlineregionofregistration,MiddleEast...............................................29Chart63:GrowthinCTKsbyairlineregionofregistration,MiddleEast..........................................................................29Chart64:Ticketsalesbyregion(7-daymovingaverage),MiddleEast............................................................................29Chart65:Passengertraffic(O-D)growthbycountryinQ42023,MiddleEast..............................................................29Chart66:Aircraftdeliveriesin2015-2024(scheduled),MiddleEast.................................................................................295QuarterlyChartbookQ42023I.TheBusinessCycle.GlobalGDPgrowthstoodat3.1%in2023andislikelytoremaininthisvicinityalsothisyearandnext.Thisisinlinewiththelong-termaveragegrowthrate,anditisaremarkableoutperformancecomparedtotherecessionforecaststhatdominatedthebusinesscycleconversationlastyear(Chart1).TheUnitedStates(US)inparticularbeatexpectationsin2023,growingby2.5%(annualleveloverfull-year2022).Thiswasanaccelerationfromthe1.9%recordedin2022onthesamebasis.India’sgrowthratealsoexceededexpectationsin2023andrecordedoneofthehighestgrowthratesamonglargereconomies.At6.3%,IndiasurpassedChina’s5%,ashasbeenthecasesince2014.India’sshareofglobalGDP(onapurchasingpowerparitybasis1)isestimatedat7.75%in2024bytheIMF.Thisisofcoursemuchsmallerthanthe19%shareofChinaorthe15.2%oftheUSeconomyonthisbasis.Nevertheless,ifIndiacontinuestogrowatthispace,itsshareintheglobaleconomywillincreaserapidly,anditscontributiontoglobalGDPgrowthwillbecomeevermoreimportant(Chart2)2.Localrecessionsdidoccurthoughin2023,itmustbesaid,affectingGermanyandsomeEasternEuropeancountries,nottomentionArgentinaorSudan,amongothers..Amajorfactorthathasprotectedtheglobaleconomyagainstrecessionsistheunusuallylowunemploymentratesseenaroundtheworld(Chart3).TheUSstunnedtheworldwithamonthlyjobcreationinJanuary2024of353,000,morethantwicetheanticipatednumber.Theunemploymentratestoodat3.7%andhasbeenatorbelow4%sinceDecember2021.Apossiblehintofforthcomingslowdowninlaborgrowthwasthesmalldeclineintheaverageworkweekandinovertime.TheEUandtheeuroareaunemploymentratesarealsoathistoriclows,at5.9%and6.4%respectivelyinDecember2023.Chinareported5.2%unemploymentin2023thoughyouthunemploymentismuchhigher,at14.9%,usinganewmethodology.India’sjoblessratewas6.6%inJanuary2024,downfrom8.7%inDecember2023...Withsuchtightlabormarkets,itisalmostsurprisingthatinflationhaseasedasmuchasithas.Nevertheless,withrespecttocentralbanksmostlytargeting2%inflationrates,majoreconomiesarestillsomedistanceaway(Chart4).IntheUS,consumerpriceinflation(CPI)was3.1%year-on-year(YoY)inJanuary2024.While2023wascharacterizedbyrecessionfears,2024seemstobeimbuedwithhopesforimminentinterestratecuts.Suchhopesarelikelytobedashedaslongaslabormarketsremainthistightandinflationthishigh.Theyearhasthusgloballystartedoffonaratherpositivenote,andthegreatestsourceofturbulencemightcomefromtherecord-breakingnumberofelectionsthatwillbeheldaroundtheworldthisyear.Amajorityoftheworldpopulation,some4.2billionpersons,willvotethisyear,inaround70countries.Withpolarizationrunninghigh,electionresultscangiverisetostarklydifferentpolicies.MuchwillhingeontheUSelectionsinNovember2024,butotherimportantelectionsincludeIndia’sbetweenAprilandMay,andtheEuropeansvotingfortheirEuropeanUnionrepresentativesinJune.Fornow,theglobaleconomicpolicyuncertaintyindexiscertainlybelowitsCovid-19-relatedpeakbutat254itisalsowellaboveitsmorenormallevelascanbeseeninChart5..InterestratecutexpectationswilllikelyweighontheUSdollar’svalueagainstothercurrencies,unlesselectionsandothersourcesofgeopoliticalstressreigniteitssafe-havenstatus.Ifsuchrisksarecontained,2024couldbeayearofrelativeUSdollarstabilityafteritsstrongrunsince2021,whichwouldarguablybeaboonfortheglobaleconomyandforallsettlingbillsanddebtsinthiscurrency(Chart6).1Purchasingpowerparity(PPP)isabettergaugeforcomparingcountries’performancethancurrentUSDwhichobviouslyreflectsexchangeratefluctuationstoagreaterextent.PPPcomparisonsyieldgreaterweightsforemergingeconomiesintermsofsharesofglobalGDPthancurrentUSD.2ContributionstoworldGDPgrowtharecalculatedbymultiplyingacountry’sGDPgrowthratebyitsshareintheglobaleconomy.6QuarterlyChartbookQ42023Chart1:Globalgrossdomesticproduct(constantUSD),annual%Chart2:ContributionfromlargeeconomiestoworldGDPgrowthin%change8percent108ChinaIndiaRestoftheWorldUnitedStatesEuroAreaWorldGDPGrowthRate64642200-2-4-2-41980198519901995200020052010201520202025Source:IMFWorldEconomicOutlookSource:IATASustainability&Economics,basedondatafromIMFWorldEconomicOutlook.Chart3:Unemployment,totalbycountrygroup,%oftotallaborforceChart4:Inflationinmajoreconomiesin%2015105ChinaEuroAreaJapan12108IndiaUnitedStates6World,Advanced420World,Emerging&Developing0-52010Source:Macrobond20102012201420162018202020222012201420162018202020222024Source:WorldBank,GlobalEconomicMonitorChart5:GlobaleconomicpolicyuncertaintyindexChart6:RealEffectiveExchangeRateIndex,Broad4504003503002502001501005012011010090USDEURJPYCNY80700199720002003200620092012201520182021Source:FederalReserveBankofSt.LouisJan-2018Jan-2019Jan-2020Jan-2021Jan-2022Jan-2023Source:BIS7QuarterlyChartbookQ42023II.EnergyTransitionConventionalAviationFuel.Amidthecontinuedrecoveryinairtravel,jetfueldemandremainedhighin2023,withtheglobalaveragepriceconsistentlyaboveUSD100perbarrelduringthefourthquarter(Chart7).Geopoliticaltensions,suchasthewarintheMiddleEast,couldimpedesupply,whileOrganizationofthePetroleumExportingCountries(OPEC)’sproductioncurbsputfurtherupwardpressureontheprice.Coupledwithlimitedrefiningcapacity,thejetfuelcrackspreadstayedaroundUSD30perbarrelinQ4.Thisiswellabovepre-pandemiclevels,whenthecrackspreadwasboundedbetweenUSD9-22perbarreloverathree-yearrangefrom2017-2019(Chart8)..SupplyconstraintshavebeenexacerbatedbyattacksontankersintheRedSea,andthishasgeneratedregionaldisparitiesinthejetfuelprice(Chart9).WithEuroperelyingsignificantlyonjetfuelimportsfromEastofSuez(mainlyIndiaandtheArabGulf),itspricelevelalmostcaughtupwiththeAmericasinQ4.Thelatterregionhasseencomparativelyhighpricesasaresultofthecombinationofdisruptedlocalproductionandstrongairtraveldemand.Inthemeantime,asluggishrecoveryindemandforinternationalairtravelinChinaputalidontheregionaljetfuelpriceinAsia,whererefinedproductsarecomparablywellsupplied.SustainableAviationFuel.Overthecourseofthepasttwoyears,theairlineindustryhassignedatotalof75offtakeagreements(theseareagreementsbetweenaSustainableAviationFuel(SAF)producerandanairlinetopurchaseaquantityoftheproducer’sfutureSAFproduction).Thisincludes53bindingand22non-bindingagreements,thelatterofwhichcoversbothmemorandaofunderstanding(MoUs)andlettersofintent(Chart10)..Outofthetotal75SAFofftakeagreements,64arebasedonbio-SAFsfromfourprimarypathways:Hydro-processedEstersandFattyAcids(HEFA),HEFACo-Processing,SyngasFischer-Tropsch(Syngas-FT),andAlcohol-to-Jet(AtJ).Theremainingelevenagreementsareassociatedwithe-fuelSAF,derivedfromvariousPower-to-Liquid(PtL)projects.HEFAandHEFACo-ProcessingarethemostmatureandcommerciallyviableSAFtechnologiescurrentlyinuse,andtheyaccountforthemajorityofSAFofftakeagreements..Over160renewablefuelprojectsspanningmorethan110producersin37countrieshavebeenannouncedtodate,whichmadevariouslevelsofcommitmenttoincludingSAFintheirproductslate.Theestimatedglobalrenewablefuelcapacityby2029hasrisenfromaprojected59milliontonnesinQ3to64milliontonnesinQ42023(Chart11).Thereisathreetofive-yearlagbetweenprojectannouncementandcommercialization,andfurthercapacityannouncementsfor2027andbeyondcanbeexpected...In2029,theHEFApathwayisexpectedtocontributeover82%oftotalSAFproduction,followedbyAtJataround8%(Chart12).Afurther4.2%willlikelycomefromHEFACo-ProcessingaccordingtothelatestQ4projections,withtheremainderfromtheotherpathways.Thedevelopmentofbiorefiningfacilitiesisbeingacceleratedbythegrowingtrendoffossilrefineriesbeingretrofitted(e.g.,Phillips66announcedtheretrofittingoftheirRodeoplantinSanFrancisco)ordecommissionedandsoldinthesecond-handmarket.Theadvantagewiththeseoptionsisthelowercapitalintensitycomparedtobuildinganewplantfromscratch.Whilemanynewbiorefiningfacilitieswillberequiredtoachievedecarbonizationinaviation,theurgentscalingupofproductioncapacitycanbegreatlyhelpedbyprioritizingtheretrofittingofoldfossilrefineriesintobiofuelproductionfacilities.8QuarterlyChartbookQ42023Chart7:Jetfuelprice,USD/bblChart8:Jetfuelcrackagainstcrudeoil,USD/bbl6018016014012010080CrackSpreadJetFuelPriceDatedBrent3-yrrange(2017-2019)2023monthlyaveraganFebMarAprMayJunJulAugSepOctNovDecSource:IATASustainabilityandEconomics,S&PGlobalCommodityInsights.Sources:S&PGlobalCommodityInsightsS&PGlobal`Chart9:Quarterlyjetfuelpricesin2023byregion,USD/bblChart10:NumberofSAFofftakeagreements,asofDec2023Asia&OceaniaEurope&CISNorthAmericaGlobalNumberofMidEast&Africa10987654321080706050403020100agreementsofthemonth9LatinAmerica&Caribbean13012011010090Cumulativenumberofagreements(RHS)654444443333332222211108070Qtr1Qtr2Qtr3Qtr42022Source:IATASustainabilityandEconomics2023Source:IATASustainabilityandEconomics,S&PGlobalCommodityIinsightsChart11:CumulativerenewablefuelcapacityinmilliontonnesChart12:Totalrenewablefuelcapacityby2029,%sharebypathway7063.564.059.36050403020100PtL2.1%48.8SyngasFT3.5%38.4HEFACo-processing4.2%27.0HEFAAtJ15.882.1%7.8%4.3CHJ0.3%20222023202420252026202720282029Source:IATASustainability&EconomicsSource:IATASustainabilityandEconomics9QuarterlyChartbookQ42023III.PassengerandCargoTrafficPassengerTraffic..Inthefourthquarterof2023,theaviationsectorcontinuedtorecoverwhilenavigatingeconomicandgeopoliticaltensions.Globalairpassengertrafficexperiencedasignificantupswingof28.6%year-on-year(YoY)inthefinalquarterof2023,asmeasuredbyRevenuePassengerKilometers(RPKs,Chart13).Airlinesexpandedtheirseatofferingsby27.1%comparedtothepreviousyeartomeettherisingdemand(Chart14).Thisimpressiverecoverynotwithstanding,bothpassengernumbersandseatavailab