Financial Highlights

IATA now projects net profits of $36.0 billion in 2025, up from $32.4 billion in 2024, though marginally lower than its previous forecast of $36.6 billion. The net profit margin is expected to rise to 3.7%, while the return on invested capital remains stable at 6.7%.

Operating profits are forecast at $66.0 billion, with total revenues reaching a record $979 billion, and expenses at $913 billion.

 Passenger traffic is expected to hit an all-time high of 4.99 billion, and air cargo volumes will grow modestly to 69 million tonnes.

“This is a strong result considering the headwinds,” said Willie Walsh, IATA Director General. “The improvement reflects resilience across the industry, driven in part by a 13% drop in jet fuel prices and continued demand for air travel.”

Economic and Operational Context

While global GDP growth is expected to slow to 2.5% in 2025, airline profitability continues to climb, buoyed by lower fuel prices and strong demand. Passenger load factors are expected to reach a record 84.0%, highlighting efficient use of limited capacity amid aircraft delivery delays and supply chain constraints.

Passenger revenues are forecast to hit $693 billion, supported by an additional $144 billion from ancillary services. Despite a 4.0% drop in passenger yields, strong demand persists, with the average return airfare falling to $374, down 40% from 2014.

In contrast, cargo revenues are expected to decline by 4.7% to $142 billion, primarily due to reduced global trade growth and a 5.2% decline in cargo yields.

Fuel and Sustainability Pressures

Jet fuel costs are forecast to average $86/barrel in 2025, down from $99 in 2024, reducing the industry fuel bill to $236 billion. However, IATA warns of an unsustainable rise in Sustainable Aviation Fuel (SAF) costs, with 2025 prices expected to be 4.2 times higher than jet fuel due to compliance fees imposed by European suppliers.

SAF production is expected to double to 2 million tonnes, but still represents only 0.7% of total airline fuel use. Walsh criticised fuel suppliers for “profiteering” and urged urgent investment to scale SAF availability to meet the sector’s net zero 2050 goals.

Fleet and Supply Chain Disruptions

Global supply chain failures continue to stall aircraft deliveries, now forecast at 1,692 units in 2025—the highest since 2018, yet 26% lower than previous estimates. Engine reliability issues and spare part shortages have grounded over 1,100 aircraft under 10 years old, mostly powered by PW1000G engines.

“The persistent failure of manufacturers to resolve these issues is unacceptable,” said Walsh, citing a 14-year backlog for new aircraft.

Risks on the Horizon

Key risks to the outlook include:

• Geopolitical conflict, including the Russia-Ukraine war and Middle East instability
• Escalating trade tensions, particularly under uncertain U.S. trade policy direction
• Global fragmentation, with potential erosion of aviation’s unified regulatory framework

Walsh concluded: “At $7.20 profit per passenger, the industry operates on razor-thin margins. Any new tax, fee, or regulatory cost could undermine the gains we’ve made. Governments must recognise the strategic economic role aviation plays in supporting 86.5 million jobs and 3.9% of global GDP.”