Airline profitability to strengthen in 2025 despite headwinds
Despite facing multiple headwinds, the global airline industry demonstrates resilience, with modest profitability improvements anticipated in 2025
The International Air Transport Association (IATA) projects that global airline profitability will modestly improve in 2025, with net profits expected to reach $36.0 billion, up from $32.4 billion in 2024. This forecast, announced at IATA's Annual General Meeting in New Delhi, reflects the industry's resilience amid challenges such as geopolitical tensions, trade disputes, and supply chain disruptions. Key contributing factors include declining fuel prices and sustained passenger demand, although the outlook remains tempered by uncertainties in global markets.
Key takeaways
- Profitability outlook: Net profits are projected at $36.0 billion for 2025, an increase from $32.4 billion in 2024, though slightly below the previous forecast of $36.6 billion. The net profit margin is expected to rise to 3.7% from 3.4% in 2024.
- Passenger demand: Passenger numbers are forecasted to hit 4.99 billion, up 4% from 2024, with passenger revenues reaching $693 billion.
- Regional performance: All regions are expected to report net profits in 2025. North America is projected to achieve the highest absolute profit at $12.7 billion, while the Middle East is anticipated to have the highest net profit margin at 8.7%. Latin America is the only region expected to see a decline in profitability compared to 2024.
- Sustainability goals: The industry remains committed to achieving net-zero carbon emissions by 2050. However, sustainable aviation fuel (SAF) production is expected to meet only 0.7% of fuel needs in 2025, highlighting the need for significant scale-up to meet environmental targets.
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