Airlines set to record higher profits of $36 billion in 2025, says IATA, ET Infra
Efficiency, fuel and demand trends
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Fleet constraints and geopolitical risk
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The global airline industry is projected to earn net profits of $36 billion, up from $32.4 billion in 2024, the International Air Transport Association said in its latest financial outlook for 2025.As per the report, net profit margins are expected at 3.7 per cent, up from 3.4 per cent in 2024, while return on invested capital is projected at 6.7 per cent, marginally above 2024 levels.Total traveller numbers are expected to reach 4.99 billion in 2025, and air cargo volumes 69 million tonnes, the report noted. These are higher than 2024 levels but lower than previous projections.Willie Walsh, IATA 's Director General, said, 'The first half of 2025 has brought uncertainties to 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 has fallen 13 per cent compared with 2024. That's still about half the average profitability across all industries. But considering the headwinds, it's a strong result that demonstrates the resilience that airlines have worked hard to fortify.'IATA noted that passenger load factors are expected to reach 84 per cent in 2025. Passenger revenues are projected to be $693 billion, supported by ancillary revenues of $144 billion. Passenger growth, measured in Revenue Passenger Kilometres, is expected at 5.8 per cent. Passenger yields are forecast to fall by 4 per cent. The real average return airfare in 2025 is expected to be $374.Polling data in April 2025 showed 40 per cent of respondents planned to travel more, while 47 per cent expected to spend more on travel in the next 12 months. Some 68 per cent of business travellers said trade tensions would not impact their travel plans.Cargo revenues are forecast to fall to $142 billion, with cargo growth slowing to 0.7 per cent and cargo yields expected to fall by 5.2 per cent. Trade policies are cited as a key factor.Fuel costs are projected at $86 per barrel, leading to a fuel bill of $236 billion. Sustainable Aviation Fuel (SAF) production is forecast to double to 2 million tonnes, though still representing 0.7 per cent of total airline fuel use. SAF costs remain higher than traditional jet fuel.Walsh criticised fuel suppliers, stating, 'Fuel suppliers must stop profiteering on the limited SAF supplies available and ramp up production to meet the legitimate needs of their customers.'The Carbon Offsetting and Reduction Scheme for International Aviation ( CORSIA ) is expected to cost airlines $1 billion in 2025. Only Guyana has issued eligible credits under the scheme.Fleet expansion continues to face constraints. The aircraft backlog has exceeded 17,000 units, with the average fleet age now at 15 years. Aircraft deliveries in 2025 are expected at 1,692 units, down from previous estimates.Walsh commented, 'Manufacturers continue to let their airline customers down. Every airline is frustrated that these problems have persisted for so long.'
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