Air travel demand set to grow in 2025 despite trade tensions: IATA annual report

Airlines are expected to transport more passengers and more cargo in 2025 than in 2024, even though previous demand forecasts were affected by trade tensions and a decline in consumer confidence, according to Willie Walsh, the Director General of the International Air Transport Association (IATA). 

IATA issued the updates in its 2025 airline industry financial outlook on June 2, 2025, during the 81st IATA Annual General Meeting (AGM), hosted by IndiGo in Delhi from June 1 to June 3, 2025. 

In a statement, Walsh noted that the first half of 2025 “has brought significant uncertainties to global markets.” However, he added that “by many measures including net profits, it will still be a better year for airlines than 2024, although slightly below our previous projections.” 

Revenues set to reach record $979 billion 

IATA reported that total revenues are now projected to rise by 1.3%, surpassing a 1% rise in total expenses, shoring up industry profitability. Industry revenues are anticipated to hit a record $979 billion in 2025, reflecting a 1.3% increase from 2024. 

According to the updated outlet, net profits are projected to hit $36 billion, up from $32.4 billion in 2024, while operating profits could rise to $66 billion, an increase from the estimated $61.9 billion in 2024, but down from the previously projected $67.5 billion. 

“Perspective is critical to put into context such large industry-wide aggregate figures,” said Walsh. “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.” 

At the same time, passenger revenues are projected to hit $693 billion in 2025, marking a 1.6% rise from the year before. Passenger growth, measured in Revenue Passenger Kilometers (RPK), is anticipated to be 5.8%. 

Aircraft deliveries and supply chain challenges 

Aircraft deliveries are also expected to rebound in 2025, with 1,692 aircraft scheduled for delivery, the highest figure since 2018. However, this is still about 26% below previous forecasts issued last year.  

The IATA outlook noted that “further downward revisions are likely,” due to supply chain issues, which are expected to continue throughout 2025 and possibly to the end of the decade. 

Shortages of spare parts and ongoing engine problems have contributed to the downward revision of aircraft delivery forecasts. According to IATA, over 1,100 aircraft under 10 years old are currently in storage, with nearly 70% of those equipped with Pratt & Whitney PW1000G engines. 

“Manufacturers continue to let their airline customers down,” said Walsh. “Every airline is frustrated that these problems have persisted so long. And indications that it could take until the end of the decade to fix them are off-the-chart unacceptable.” 

Strong public confidence in air travel  

Despite industry headwinds, public confidence in air travel remains strong. A public opinion poll, commissioned by IATA in April 2025 covering 6,500 respondents from 15 countries who traveled at least once in the past year, showed that 97% of travelers were satisfied with their travel experience. 

The results also revealed that 89% agreed that air travel makes their lives better, 81% appreciated the availability of choice in travel planning, and 78% agreed that air travel is good value for money. 

Additionally, IATA noted that the air transport sector is dedicated to reaching net zero CO2 emissions by 2050. According to the association, travelers are expressing high levels of confidence in this effort, with 81% agreeing that the industry is demonstrating a commitment to work together to achieve this ambitious aim. The post Air travel demand set to grow in 2025 despite trade tensions: IATA annual report appeared first on AeroTime.

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