The global airline industry is expected to achieve US$36.6 billion in net revenue in 2025, boosted by a record 5.2 billion passengers set to fly, the industry’s main lobby group said in its annual forecast.
The outlook represents a 16% increase compared to 2024 figures. Industry profit margins will be 3.6%, higher than 3.3% in 2024, the International Air Transport Association said Wednesday.
Lower oil prices and higher demand will boost profitability, While potential tariffs and trade wars by the incoming Trump administration could hurt the industry’s prospects, the industry group said. Iata also expects industry revenue to surpass $1 trillion for the first time in 2025.
“Costs are being strongly affected by delays in the acquisition of new aircraft, which keeps older aircraft in service”said Iata Director General Willie Walsh in an interview on Bloomberg TV.
“Although next year will be better from a financial point of view, I think it would have been much better if we had not faced all these problems in the supply chain.”
While aviation industry demand has rebounded sharply following the pandemic, Profit margins remain very small.
Airlines are battling supply chain disruptions that are delaying deliveries of newer, more fuel-efficient planes and keeping existing aircraft grounded for maintenance for longer.
North America remained the largest contributor to global industry profits in 2024, although margins were lower than before the pandemic due to slow aircraft deliveries and higher costs, particularly for low-cost airlines, according to Iata.
The Middle East recorded the best financial performance and was the only region where passenger revenue increased, thanks to strong demand for premium long-haul travel.
In comparison, European airlines were affected by the suspension of flightsincreased wages, higher airport taxes and taxes that affected competitiveness in 2024, according to Iata. The lobby group predicts profitability will improve in 2025 as low-cost airlines resume flights with grounded planes.
IATA said its outlook is subject to change. if the wars in Ukraine and the Middle East worsen or if oil prices do not fall.
“There is no security risk when transiting through Russian airspace”Walsh said. “We hope that peace will return to the region and that this will eventually lead to the reopening of parts of the airspace.”
