Global airlines will fly nearly 5 billion passengers in 2024 and revenues will soar just shy of $1 trillion, both record highs, a top industry association said on Monday, as the sector "can turn the page" following the pandemic.

The International Air Transport Association (IATA) said it expected the worldwide industry to generate $30.5 billion of profit this year, higher than an upwardly revised $27.4 billion in 2023, as carriers control underlying labor costs despite recent strikes.

That comes just four years after the industry collapsed to a $140 billion loss in 2020 due to the pandemic and is above the $25.7 billion forecast for 2024 issued in December.

However, total expenses are also expected to hit a record high this year, climbing 9.4% to $936 billion, IATA announced at its annual general meeting in Dubai.

"The environment is better than we had expected, particularly in Asia," Director General Willie Walsh told Reuters on the sidelines of an annual meeting of IATA's more than 300 members, which account for more than 80% of global air traffic.

The expected $30 billion profit "is a great achievement considering the recent deep pandemic losses," Walsh told the body's annual meeting.

"Without a doubt, aviation is vital to the ambitions and prosperity of individuals and economies. Strengthening airline profitability and growing financial resilience is important," he added.

However, the airline industry warned its ability to serve a strong rebound in travel demand is being hampered by disruption to global supply chains, including deliveries of its fleets.

In addition to the record expenses, the return on invested capital is estimated at 5.7% in 2024, about 3.4 percentage points below the average cost of capital.

"An aggregate return above the cost of capital ... continues to elude the global airline industry," IATA said.

Airlines are also facing a sharp rise in costs due to shortages of parts and labor and challenges related to climate change, including flooded runways and forest fires.

Six weeks ago, Dubai's airport, the world's busiest for international passengers, was closed by severe flooding that left standing water on the runway and forced the cancellation of more than 2,000 flights.

Passenger yields – or the average amount paid by a passenger to fly one mile – are expected to strengthen by 3.2% compared with 2023, IATA said in a twice-yearly economic outlook. In part, that is because capacity growth is constrained, driving up average fares.

By contrast, the corresponding figure for cargo is expected to fall by 17.5% in 2024 as freight markets return to normal patterns after booming during the pandemic.

Airline activity is widely seen as a litmus test for business or consumer confidence, as well as trade.

The industry has high fixed costs and regulations discouraging most cross-border mergers, meaning it remains fragmented.

"The margin remains wafer thin; we're still looking at a margin of just over 3%," Walsh said. "(That) performance is still well below where the industry needs to be."

In Asia, IATA more than trebled its industry profit forecast for 2024 to $2.2 billion despite a sluggish recovery in international travel in China.

At $14.9 billion, unchanged from earlier forecasts, North America remains the most profitable region with "strong consumer spending despite cost-of-living pressure," IATA said.

IATA said airlines had been hit by unforeseen maintenance issues. That appeared to be a reference to repair bottlenecks for engines built by Pratt & Whitney, which are expected to leave hundreds of Airbus jets grounded this summer.

Industry sources said on Friday that Airbus, the world's largest planemaker, was itself facing a new surge in supply problems, casting doubt on output plans for the second half. The planemaker has said it is sticking by full-year delivery goals.

Rival Boeing is producing far fewer of its best-selling 737 Max jets than originally planned after a mid-air cabin panel blowout in January, which prompted U.S. regulators to cap its production.

IATA's 2025 annual general meeting will be held in Delhi, India, hosted by Indian carrier IndiGo, the organization said on Monday.