Airline sector set for stronger 2025 profits as IATA revises forecast
June 2, 2025
The global airline industry is on course to post higher profits this year despite mounting economic pressures, with falling fuel prices and steady passenger demand offering a boost, though growth remains uneven.
According to the International Air Transport Association (IATA), airlines are expected to generate a combined net profit of $36 billion in 2025, up from $32.4 billion in 2024. That marks an improvement, but slightly down on previous expectations of $36.6 billion announced last December.
Speaking on the outlook, IATA Director General Willie Walsh said: “The first half of 2025 has brought significant uncertainties to global markets. Nonetheless, by many measures including net profits, it will still be a better year for airlines than 2024, although slightly below our previous projections.
“The biggest positive driver is the price of jet fuel which has fallen 13% compared with 2024 and 1% below previous estimates. Moreover, we anticipate airlines flying more people and more cargo in 2025 than they did in 2024, even if previous demand projections have been dented by trade tensions and falls in consumer confidence.
“The result is an improvement of net margins from 3.4% in 2024 to 3.7% in 2025. That’s still about half the average profitability across all industries. But considering the headwinds, it’s a strong result that demonstrates the resilience that airlines have worked hard to fortify.”
Passenger numbers are expected to hit a record 4.99 billion globally in 2025, representing a 4% year-on-year rise, although that still falls short of IATA’s earlier projection of 5.22 billion.
Cargo volumes are expected to climb only marginally, up 0.6% to 69 million tonnes, with slowing global trade weighing on demand.
From a UK perspective, while international travel demand remains robust, especially for leisure routes, European carriers continue to face cost pressures, including rising airport fees and environmental taxes, which are adding strain to long-haul operations and limiting profitability across the continent.
Operating profits across the sector are forecast at $66 billion, a rise on last year’s $61.9 billion figure, although slightly below the previously projected $67.5 billion. Total revenues are set to reach a record $979 billion, while expenses are expected to climb to $913 billion, both figures revised downwards from earlier estimates.
