Global airline revenues to surpass $1 trillion in 2025, Iata forecasts

Iata has forecast lower oil prices will marginally improve airline profitability next year, with net profits globally predicted to reach almost $37 billion, up from an estimated $31.5 billion this year.

Airline association Iata expects total industry revenues to surpass $1 trillion for the first time in 2025, increasing 4.4% on 2024, with net profit per passenger hitting an average $7, below the high of $7.9 in 2023 but up on the average of $6.4 this year.

Global passenger numbers are also expected to hit a record level next year, exceeding five billion for the first time, with the number of flights hitting 40 million.

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Average fares are forecast to fall by 1.8% year on year in 2025, with Iata suggesting fares will have fallen by 44% when adjusted for inflation since 2014.

Iata reported lower jet fuel prices and efficiency gains would drive the improved profitability, with a total fall in fuel costs of 4.8% forecast despite an estimated 6% increase in the amount of fuel used.

But in a statement, Iata argued: “Further increases are being held back by forced capacity discipline resulting from unresolved supply chain issues.

“This is limiting growth opportunities and driving up several cost areas, including aircraft leasing and maintenance.”

The association also insisted airlines’ average net profit margin of 3.3% this year and a forecast 3.6% next year remains too low.

Iata director general Willie Walsh noted industry revenues are likely to exceed $1 trillion but said: “It’s important to put that into perspective.

“A trillion dollars is almost 1% of the global economy. That makes airlines a strategically important industry. But airlines carry $940 billion in costs. They retain a net profit margin of just 3.6%.

“The buffer between profit and loss, even in a good year, 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.”

Instead, he argued: “Our monopoly infrastructure suppliers all too often let us down on performance and efficiency.”

Iata estimates the total profits of Europe’s airlines as $10 billion this year, at an average rate of $8.2 per passenger, rising to almost $12 billion and $9.2 per passenger next year.

It forecasts demand in Europe will rise by 7% year on year in 2025, and capacity barely keep pace at 6.5% up.

However, Iata notes “strong geopolitical and economic uncertainties” pose significant risks to the industry outlook and this could “change significantly” if oil prices rise.