Global airline industry is expected to post net profits of USD 36 billion in 2025: IATA
Despite global economic uncertainty, International Air Transport Association (IATA) has forecast a slight rise in airline industry profitability over the previous year.
In a press statement, IATA says the global airline industry is expected to post net profits of USD 36 billion in 2025, up from USD 32.4 billion in 2024. This figure is slightly lower than the earlier forecast of USD 36.6 billion made in December 2024. However, the net profit margin is projected to rise to 3.7 pc from 3.4 pc in 2024, and is marginally higher than the previously estimated 3.6 pc. Return on invested capital is expected to reach 6.7 pc, compared with 6.6 pc last year.
It adds that operating profits are anticipated to reach USD 66 billion, up from an estimated USD 61.9 billion in 2024, but lower than the earlier projection of USD 67.5 billion. Total revenues are forecast to reach USD 979 billion, a 1.3 pc, though falling short of the previous USD 1 trillion estimate. Total expenses are expected at USD 913 billion, a 1 pc increase in previous year.
Willie Walsh
“The first half of 2025 has brought significant uncertainties to global markets. Nonetheless, by many measures including net profits, it will still be a better year for airlines than 2024, although slightly below our previous projections. The biggest positive driver is the price of jet fuel which had fallen 13 pc compared with 2024 and 1 pc below previous estimates. Moreover, we anticipate airlines flying more people and more cargo in 2025 than they did in 2024, even if previous demand projections have been dented by trade tensions and falls in consumer confidence. The result is an improvement of net margins from 3.4 pc in 2024 to 3.7 pc in 2025. That is still about half the average profitability across all industries. But considering the headwinds, it is a strong result that demonstrates the resilience that airlines have worked hard to fortify,” says Willie Walsh, Director General, IATA.
According to the statement, total passenger numbers are projected to reach 4.99 billion this year, up by 4 pc, though lower than the earlier projection of 5.22 billion. Cargo volumes are expected to rise to 69 million tonnes, an increase of 0.6 pc, but below the previous projection of 72.5 million tonnes.
Further, IATA says that despite a projected fall in global GDP growth from 3.3 pc in 2024 to 2.5 pc in 2025, airline profitability is set to improve. This is attributed mainly to the decline in oil prices. Additionally, sustained employment levels and moderated inflation are expected to maintain consumer and business travel demand, even if not at previously forecast rates.
As per statement, the average passenger load factor is expected to reach 84 pc, due to delayed aircraft deliveries and continued supply chain issues in aerospace manufacturing. However, the total revenues are projected to grow faster than total expenses, supporting the industry’s financial outlook.
According to IATA, passenger revenues are expected to reach USD 693 billion this year, an increase of 1.6 pc. This includes an estimated USD 144 billion from ancillary revenues, up 6.7 pc. Passenger growth, measured in Revenue Passenger Kilometres (RPK), is projected at 5.8 pc, reflecting a return to pre-pandemic patterns. But yields are expected to decline by 4 pc, influenced by lower fuel prices and competition. The average return airfare is expected to be USD 374, 40 pc below 2014 levels.
Based on the association’s polling data, airline association says that 40 pc of respondents will travel more in the coming year than they did over the past year, while 53 pc expect to travel the same amount. Only 6 pc anticipate travelling less. In terms of spending, 47 per cent plan to spend more on travel, 45 pc the same, and 8 per cent less. Among business travellers, 68 pc stated they would increase travel to meet customers despite trade tensions, and 65 pc indicated such tensions would not affect their plans.
IATA says cargo revenues are projected to reach USD 142 billion this year, a decline of 4.7 pc compared to 2024. The drop is attributed to trade restrictions, tariffs, and lower GDP growth. Cargo volume growth is expected at 0.7 pc, down from 11.3 pc in 2024. Cargo yields are projected to fall by 5.2 pc, impacted by reduced demand and lower oil prices. Despite this, cargo demand saw an increase of 5.8 pc.
The statement says that industry expenses are expected to reach USD 913 billion in 2025, a rise of 1 pc from the previous year. Jet fuel prices are forecast to average USD 86 per barrel, lower than the USD 99 average in 2024. This is expected to reduce the total fuel bill to USD 236 billion, comprising 25.8 pc of total operating costs, and USD 25 billion lower than 2024. It notes that minimal hedging activity suggests most airlines will benefit from reduced fuel prices. Jet fuel prices are not expected to be affected by trade tensions.
Airline association says that sustainable aviation fuel (SAF) production is projected to double to two million tonnes in 2025, which would represent 0.7 pc of total airline fuel use. It states that although production doubled from one million tonnes in 2024, exponential growth is needed to support the sector’s 2050 net zero carbon emissions goal.
The average cost of SAF in 2024 was 3.1 times that of jet fuel, resulting in an additional cost of USD 1.6 billion. In 2025, SAF is expected to be 4.2 times more expensive than jet fuel. IATA attributes this to compliance fees levied by European suppliers to manage SAF blending mandates.
In terms of fleet supply, IATA says that the aircraft backlog exceeds 17,000, significantly above the pre-pandemic level of 10,000–11,000, implying a wait time of up to 14 years. Any changes to tariff exemptions could further impact production and supply chains.
Additionally, the airline association says that supply constraints have increased leasing costs, raised the average fleet age to 15 years, up from 13 years in 2015 and halved the fleet replacement rate from 5–6 pc in 2020. Airlines are also operating larger aircraft than required on certain routes, affecting efficiency.
The statement says that aircraft deliveries are expected to total 1,692, the highest since 2018 but still 26 pc lower than earlier estimates. It notes that delivery projections could be revised further downward due to ongoing supply issues. Engine reliability and spare part shortages continue to contribute to a high number of aircraft groundings. More than 1,100 aircraft under 10 years old are in storage, representing 3.8 pc of the fleet compared to 1.3 pc between 2015 and 2018. Nearly 70 pc of these are equipped with PW1000G engines.
“Manufacturers continue to let their airline customers down. Every airline is frustrated that these problems have persisted so long. And indications that it could take until the end of the decade to fix them are off-the-chart unacceptable,” adds Walsh.
According to IATA, all regions are forecast to report collective net profits this year, with Latin America being the exception. It projects that African carriers will post the lowest collective net profit margin at 1.3 pc, while Middle Eastern airlines are forecast to record the highest at 8.7 pc.
“Perspective is critical to put into context such large industry-wide aggregate figures. Earning a USD 36 billion profit is significant. But that equates to just USD 7.20 per passenger per segment. It is still a thin buffer and any new tax, increase in airport or navigation charge, demand shock or costly regulation will quickly put the industry’s resilience to the test. Policymakers who rely on airlines as the core of a value chain that employs 86.5 million people and supports 3.9 pc of global economic activity, must keep this clearly in focus,” adds Walsh.
"
