Global airlines are set to make net profits of $36.6 billion in 2025, a slight improvement from the expected $31.5 billion in 2024, the International Air Transport Association (IATA) said on Tuesday. Interestingly, the overall industry revenue will cross $1 trillion for the first time ever, touching $1.007 trillion.
According to its report titled ‘Global Outlook for Air Transport’, passenger numbers are expected to reach 5.2 billion in 2025, a 6.7 percent rise compared to 2024 and the first time that the number of passengers has exceeded the five billion mark.
Meanwhile, cargo volumes can reach 72.5 million tonnes, a 5.8 percent increase from 2024.
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“We’re expecting airlines to deliver a global profit of $36.6 billion in 2025. This will be hard-earned as airlines take advantage of lower oil prices while keeping load factors above 83 percent, tightly controlling costs, investing in decarbonization, and managing the return to more normal growth levels following the extraordinary pandemic recovery. All these efforts will help to mitigate several drags on profitability which are outside of airlines’ control, namely persistent supply chain challenges, infrastructure deficiencies, onerous regulation, and a rising tax burden,” said Willie Walsh, IATA’s director general.
Employment growth
IATA highlighted the broad benefits of growing connectivity. The most recent estimates show that airline employment is expected to grow to 3.3 million in 2025. Airlines are the core of a global aviation value chain that employs 86.5 million people and generates $4.1 trillion in economic impact, accounting for 3.9 percent of global GDP (2023 figures).
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“Looking at 2025, for the first time, traveler numbers will exceed five billion and the number of flights will reach 40 million. This growth means that aviation connectivity will be creating and supporting jobs across the global economy. The most obvious are the hospitality and retail sectors which will gear up to meet the needs of a growing number of customers. But almost every business benefits from the connectivity that air transport provides, making it easier to meet customers, receive supplies, or transport products,” said Walsh.
Passenger revenue
Passenger revenues are expected to reach $705 billion (70 percent of total revenue) with an additional $145 billion (14.4 percent of total revenues) from ancillary services in 2025. Travel continues to become more affordable as the passenger yield is expected to fall by 3.4 percent (ticket and ancillaries). Unit revenues are expected to fall by a more moderate 2.5 percent.
Seen a different way, the average airfare in 2025, including ancillaries, is expected to be $380, which is 1.8 percent lower than 2024. In real terms (adjusted for inflation) that represents 44 percent drop compared to 2014, indicating that significant value is being passed to consumers in the industry’s continued effort to improve efficiency.
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Demand increase
Passenger demand (RPKs) is expected to grow by 8 percent in 2025, which is ahead of a 7.1 percent expected expansion of capacity (ATK). Aircraft departures are forecast to reach 40 million, an increase of 4.6 percent from 2024, and the average passenger load factor is anticipated at 83.4 percent, up 0.4 percentage points from 2024.
Costs
Costs are expected to grow by 4 percent to $940 billion in 2025.
Higher costs were seen across the board in 2024, outside of fuel, putting pressure on margins. Key cost issues included intense salary pressure and one-off expenses related to several airline employee strikes in 2024. Additionally, there has been a sharp increase in maintenance costs because of aircraft groundings and an aging global fleet. Overall non-fuel unit costs rose 1.3 percent in 2024 for a total of $643 billion.
Jet fuel prices fell to $70/barrel in September 2024 for the first time since the start of the Russia-Ukraine War. In 2025, jet fuel is expected to average $87/barrel (down from $99/barrel in 2024), based on a jet fuel crack spread of $12 per barrel and a crude oil price of $75/barrel (Brent). As a result, airlines’ cumulative fuel spend is expected to be $248 billion, a decline of 4.8 percent despite a 6 percent rise in the amount of fuel expected to be consumed (107 billion gallons). Fuel is expected to account for 26.4 percent of operating costs in 2025, down from 28.9 percent in 2024.
Middle East market the strongest
The Middle East achieved the strongest financial performance in 2024 as indicated by the highest per passenger net profit among the regions. Airlines have benefitted from the region’s robust economic performance, strategic infrastructure investments, supportive government policies, and from the closure of Russian airspace to European, American, and some Asian airlines.
The Middle East was the only region to experience an increase in passenger yields in 2024, supported by a strong premium long-haul business. Yields may stabilize in 2025 due to the expected capacity expansion. Despite the escalation of the conflict in Gaza, the Gulf carriers have remained largely unaffected. Ambitious growth targets for 2025 could be impacted by supply chain issues with delays in aircraft deliveries and limited engine availability.
