The International Air Transport Association (IATA) has released its updated financial outlook for the global airline industry in 2025, predicting improved profitability over 2024, driven largely by a significant decline in jet fuel prices.
According to the revised forecast, the industry is expected to post net profits of $36.0 billion in 2025, up from $32.4 billion in 2024. While this is slightly below the earlier projection of $36.6 billion (released in December 2024), it still marks a positive trend.
The anticipated net profit margin stands at 3.7 percent, up from 3.4 percent in 2024 and higher than the previously forecasted 3.6 percent. Return on invested capital is also expected to improve marginally to 6.7 percent, compared with 6.6 percent last year, remaining largely consistent with earlier estimates.
Operating profits are projected at $66.0 billion, up from $61.9 billion in 2024, though slightly down from the initial estimate of $67.5 billion. Meanwhile, total industry revenue is expected to reach a record $979 billion, representing a 1.3 percent increase on 2024 figures, but falling just short of the $1 trillion milestone previously forecasted.
Total expenses are forecast at $913 billion, a 1.0 percent rise over the previous year, yet still below the earlier projection of $940 billion. Passenger numbers are expected to climb to 4.99 billion in 2025, marking a 4 percent year-on-year increase. However, this figure also falls short of the previously anticipated 5.22 billion.
Air cargo volumes are forecast at 69 million tonnes, up 0.6 percent from 2024, though less than the earlier projection of 72.5 million tonnes.
“The first half of 2025 has brought a fair amount of uncertainty to global markets,” said Willie Walsh, IATA’s Director General. “Nonetheless, by many metrics including net profits, this year is shaping up to be better than 2024, even if it falls slightly short of earlier expectations.”
Walsh attributed the positive outlook largely to a 13 percent drop in jet fuel prices compared to 2024, with current levels sitting one percent below previous estimates. He also noted that airlines are projected to carry more passengers and freight in 2025, despite dampened demand expectations due to global trade tensions and weakening consumer confidence.
“This improvement in margins, from 3.4 percent in 2024 to 3.7 percent in 2025, still only amounts to about half the average profitability of other industries,” Walsh added. “But in light of the headwinds, it shows how resilient airlines have become through sustained efforts to strengthen the sector.”
To illustrate the narrow profit margins, Walsh pointed out that the projected $36 billion industry-wide profit equates to just $7.20 per passenger segment.
“That’s a slim cushion. Any new tax, increase in airport or air traffic charges, economic shock, or costly regulatory shift could quickly test the sector’s ability to absorb pressure,” he warned. “Policymakers must remember that airlines sit at the centre of a value chain supporting 86.5 million jobs and contributing 3.9 percent of global GDP.”
While global GDP is forecast to slow from 3.3 percent in 2024 to 2.5 percent in 2025, IATA expects airline profitability to continue improving, supported by lower oil prices. Sustained employment levels and easing inflation are also anticipated to maintain demand, although at more modest growth rates than previously projected.
Operational efficiency is another contributor to the positive forecast. Passenger load factors are expected to reach a record average of 84.0 percent in 2025, as the expansion and modernisation of aircraft fleets continue to be hampered by persistent supply chain issues in the aerospace sector.
Total industry revenue is projected to grow 1.3 percent year-on-year, outpacing a 1.0 percent rise in total expenses. Passenger revenue alone is expected to hit $693 billion in 2025, an all-time high and a 1.6 percent increase over 2024. Ancillary revenues are forecast at $144 billion, up 6.7 percent year-on-year.
Passenger growth, measured in Revenue Passenger Kilometres (RPK), is expected to reach 5.8 percent, signalling a return to more normal growth patterns following the post-pandemic recovery.
However, yields are expected to decline by 4.0 percent in 2025, mainly due to lower fuel prices and heightened competition. This will benefit consumers, with the average return airfare in real terms (2024 US dollars) forecast to be $374 — a 40 percent drop compared with 2014 levels.
Walsh concluded: “Travellers are continuing to benefit from increasingly affordable air travel, but the industry remains financially fragile. While the outlook is generally positive, maintaining stability will require caution, sound policy decisions, and continued operational discipline.”