Global airline industry expects record passengers flows in 2025

The outlook represents a 16% gain on 2024 figures.

The global airline industry stands to earn $36.6 billion in net income in 2025, driven by a record 5.2 billion passengers taking to the skies, the industry’s top lobby group said in its annual forecast.

The outlook represents a 16% gain on 2024 figures. Profit margins for the industry will be 3.6%, higher than the 3.3% margins in 2024, the International Air Transport Association said on Wednesday. Lower oil prices and higher demand will drive 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 exceed $1 trillion for the first time in 2025.

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While the aviation industry has seen demand rebound sharply post pandemic, profit margins remain wafer thin. Airlines are struggling with supply chain disruptions that are delaying deliveries of newer, more fuel efficient aircraft and keeping existing planes grounded for maintenance for longer.

North America remained the largest profit contributor to the global industry in 2024, though margins were at lower levels than pre-pandemic due to slower aircraft deliveries and higher costs particularly for low-cost carriers, IATA said. The Middle East recorded the strongest financial performance and was the only region where passenger yields jumped, thanks to strong demand for premium long-haul travel.

IATA said its outlook is subject to change should the Ukraine and Middle East wars worsen or oil prices fail to drop.

© 2024 Bloomberg

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