Global airline industry projected to earn $36 bn profit in 2025, IATA chief flags 'thin buffer'

The global airline industry is expected to post a net profit of USD 36 billion in 2025, slightly higher than USD 32.4 billion posted last year, the International Air Transport Association (IATA) said on Monday.

In its updated financial outlook for 2025, IATA pegged the sector’s net profit margin at 3.7%, up from 3.4% in 2024.

“By many measures, including net profits, 2025 will be a better year for airlines than 2024, even if it falls slightly short of earlier projections,” said Willie Walsh, Director General, IATA.

He cited a 13% drop in jet fuel prices compared to 2024 as a key positive driver.

Addressing the Annual General Meeting (AGM) of the International Air Transport Association (IATA) in the national capital, Walsh asserted that airspace should be kept out of trade wars.

The AGM is taking place in India after 42 years.

The association projects industry revenues to reach a record USD 979 billion in 2025, a 1.3% increase over 2024.

Total expenses are also expected to rise, albeit more modestly, by 1% to USD 913 billion.

Operating profits are forecast at USD 66 billion in 2025, up from USD 61.9 billion the previous year, though lower than the earlier estimate of USD 67.5 billion.

Air travel demand continues to rebound strongly with total passenger numbers expected to hit a record 4.99 billion in 2025, up 4% from 2024.

Cargo volumes are projected to grow modestly to 69 million tonnes.

Despite signs of recovery, Walsh cautioned against overestimating the industry's financial buffer.

“Earning a $36 billion profit is significant. But that equates to just $7.20 per passenger per segment. It’s 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,” he said.

Passenger revenues are expected to reach USD 693 billion, supported by growth in both demand and ancillary services, even as yields decline by 4% due to competition and lower oil prices. Real average return airfare is expected to drop to USD 374, 40% below 2014 levels.

Cargo revenues, by contrast, are forecast to fall to USD 142 billion, down 4.7% from 2024, amid softening global GDP and escalating trade protectionism.

The airline industry's revenues are expected to reach a historic high of USD 979 billion in 2025, around 1.3% higher than the figure seen in 2024, according to IATA, which represents about 350 airlines comprising over 80% of the global air traffic.

Around 1,700 participants are expected to attend the World Air Transport Summit, and the AGM.

According to IATA, India's aviation industry directly employs 3,69,700 people and generates USD 5.6 billion of GDP.

When indirect, induced and tourism impacts are included, the totals rise to 7.7 million jobs and USD 53.6 billion of GDP (1.5%).

The next IATA AGM will be held in Brazil in 2026.