IATA expects five billion passengers and $1 trillion in airline revenue in 2025     

The International Air Transport Association (IATA) has announced its financial outlook for the global airline industry in 2025 which forecasts a strengthening of profitability and further rises in annual passenger traffic figures which will breach the five billion passenger mark for the first time in the history of the industry.   

According to IATA’s Director General, Willie Walsh speaking at IATA’s 2024 Global Media Day in Geneva, Switzerland on December 10, 2024, the net profits for the global airlines industry in 2025 are expected to be $36.6 billion based on a 3.6% net profit margin. Describing the 2025 net profits figure as a “slight improvement” over the expected $31.5 billion net profit for 2024 (3.3% net profit margin), Walsh added that the average net profit per passenger is expected to be $7.0 (below the $7.9 high in 2023 but an improvement from $6.4 in 2024). 

Total industry revenues are expected to be $1.007 trillion, representing an increase of 4.4% from 2024. The figure will be the first time that annual industry revenues have broken the $1 trillion mark in a single year.  

Operating profit in the coming year is also expected to be $67.5 billion for a net operating margin of 6.7% (improved from 6.4% expected in 2024). Expenses are expected to grow by 4.0% to $940 billion. The return on invested capital (ROIC) for the global industry is expected to be 6.8% in 2025, which is an improvement from the 2024 ROIC of 6.6% while the returns for the industry at the global level remain below the weighted average cost of capital. 

GagliardiPhotography / ShutterstockPassenger numbers to rise again 

Passenger numbers are forecast to reach 5.2 billion in 2025, a 6.7% rise compared to 2024 and the first time that the number of passengers has exceeded the five billion mark. Cargo volumes are expected to reach 72.5 million tons, a 5.8% increase from 2024. 

“We’re expecting airlines to deliver a global profit of $36.6 billion in 2025,” said Walsh. “This will be hard-earned as airlines take advantage of lower oil prices while keeping load factors above 83%, tightly controlling costs, investing in decarbonization, and managing the return to more normal growth levels following the extraordinary pandemic recovery. All these efforts will help to mitigate several drags on profitability that are outside of airlines’ control, namely persistent supply chain challenges, infrastructure deficiencies, onerous regulation, and a rising tax burden.” 

“In 2025, industry revenues will exceed $1 trillion for the first time. It’s also important to put that into perspective. A trillion dollars is a lot, almost 1% of the global economy. That makes airlines a strategically important industry. But remember that airlines carry $940 billion in costs, not to mention interest and taxes. They retain a net profit margin of just 3.6%,” Walsh added.   

“Put another way, the buffer between profit and loss, even in the good year that we are expecting in 2025, is just $7 per passenger. With margins that thin, airlines must continue to watch every cost and insist on similar efficiency across the supply chain, especially from our monopoly infrastructure suppliers who all too often let us down on performance and efficiency,” Walsh concluded.  

Savvapanf Photo / ShutterstockAirlines have a bright 2025 ahead  

Highlighting the broad benefits of growing connectivity, Walsh described IATA airlines as the core of a global aviation value chain that employs 86.5 million people and generates $4.1 trillion in economic impact, accounting for 3.9% of global GDP (2023 figures). IATA said the most recent estimates showed that airline employment is expected to grow to 3.3 million in 2025. 

“Looking at 2025, for the first time, traveler numbers will exceed five billion and the number of flights will reach 40 million,” commented Walsh. “This growth means that aviation connectivity will be creating and supporting jobs across the global economy. The most obvious are the hospitality and retail sectors which will gear up to meet the needs of a growing number of customers.”  

“But almost every business benefits from the connectivity that air transport provides, making it easier to meet customers, receive supplies, or transport products. On top of this, growth in aviation also contributes to achieving almost all the UN’s Sustainable Development Goals (SDGs),” he added.  

Ceri Breeze / ShutterstockIn IATA’s outlook for 2025, Walsh said the organization predicts that overall financial performance is expected to improve on the back of lower jet fuel prices and efficiency gains. However, further increases are being held back by forced capacity discipline resulting from unresolved supply chain issues at the major manufacturers. IATA added that this issue is limiting growth opportunities and driving up several cost areas, including aircraft leasing and maintenance. Net profitability will also be squeezed as airlines are expected to exhaust their tax losses carry forwards from the pandemic era, leading to an increase in tax rates in 2025.  

However, not perturbed by any of this, IATA’s Chief Economist, Marie Owens Thomsen told the audience in Geneva, “All of this gives us a financial performance which I think is absolutely worth popping the champagne for after a post-pandemic rebound”.   

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