IATA projects $979bn airline industry revenue in 2025

The International Air Transport Association (IATA) has projected that airlines’ total revenues would hit a record high of $979 billion. This would be an increase of 1.3% on 2024, but below the $1 trillion previously projected).  This was contained in the updated 2025 airline industry financial outlook which showed improved profitability over 2024 and resilience […]

The International Air Transport Association (IATA) has projected that airlines’ total revenues would hit a record high of $979 billion.

This would be an increase of 1.3% on 2024, but below the $1 trillion previously projected). 

This was contained in the updated 2025 airline industry financial outlook which showed improved profitability over 2024 and resilience in the face of global economic and political shifts. 

The outlook indicated that passenger revenues are expected to reach $693 billion in 2025 (+1.6% on 2024), an all-time high. This will be bolstered by an additional $144 billion in ancillary revenues (+6.7% on 2024). 

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Passenger growth (measured in Revenue Passenger Kilometers/RPK) is expected to be 5.8%—a significant normalization after the exceptional double-digit growth of the pandemic recovery.          

According to the highlights from the expected 2025 financial performance, net profits are projected at $36.0 billion, improved from the $32.4 billion earned in 2024, but slightly down on the previously projected $36.6 billion (December 2024). 

Also, net profit margin is projected at 3.7%, improved from the 3.4% earned in 2024 and the previously projected 3.6% while return on invested capital is estimated at 6.7%, an improvement from the 6.6% earned in 2024 and largely unchanged from previous projections.

Also, Operating profits are projected at $66.0 billion, improved from an estimated $61.9 billion in 2024, but down from the previously projected $67.5 billion.

The total traveler numbers are also expected to reach a record high 4.99 billion (+4% on 2024, but below the previously projected 5.22 billion) while total air cargo volumes would reach 69 million tonnes (+0.6% on 2024.

Africa’s carriers face uncertainty

However, the report stated that Africa’s carriers face high operational costs and a low propensity for air travel expenditure in many of their home markets.

A shortage of aircraft and spare parts is dampening growth in the region. The shortage of foreign currency in some economies, particularly US dollars, is adding to the region’s challenges.

Despite these challenges, there is sustained demand for air travel in Africa, the report said.

 

‘1,692 aircraft for delivery’

In 2025, 1,692 aircraft are expected to be delivered. Although this would mark the highest level since 2018, it is almost 26% lower than year-ago estimates. The outlook said further downward revisions are likely, given that supply chain issues are expected to persist in 2025 and possibly to the end of the decade. 

Engine problems and a shortage of spare parts exacerbate the situation and have caused record-high groundings of certain aircraft types. The number of aircraft younger than 10 years in storage is currently more than 1,100, constituting 3.8% of the total fleet compared with 1.3% between 2015 and 2018. 

Nearly 70% of these grounded aircraft are equipped with PW1000G engines.

IATA’s Director General, Willie Walsh said, “The first half of 2025 has brought significant uncertainties to global 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% compared with 2024 and 1% below previous estimates. Moreover, we anticipate airlines flying more people and more cargo in 2025 than they did in 2024, even if previous demand projections have been dented by trade tensions and falls in consumer confidence.

The result is an improvement of net margins from 3.4% in 2024 to 3.7% in 2025. 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,” said the report.

“Perspective is critical to put into context such large industry-wide aggregate figures. 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. Policymakers who rely on airlines as the core of a value chain that employs 86.5 million people and supports 3.9% of global economic activity, must keep this clearly in focus,” said Walsh. 

IATA observed that Gross Domestic Product (GDP) remains the traditional driver of airline economics.

However, although global GDP growth is expected to fall from 3.3% in 2024 to 2.5% in 2025, airline profitability is expected to improve, it said.

This is largely on the back of falling oil prices. Meanwhile, continued strong employment and moderating inflation projections are expected to keep demand growing, even if not as fast as previously projected.