IATA has announced updates to its 2025 airline industry financial outlook, showing improved profitability over 2024 and resilience in the face of global economic and political shifts.
These shifts include global conflicts, trade tensions, fragmentation of industry standards and or government policy such as on the environment or trade, and oil prices.
The association projects that industry net profits will reach $36bn up from $32.4bn in 2024 with net profit margins at 3.7% up from 3.4% in 2024.
Return on invested capital is expected to reach 6.7% compared to 6.6% in 2024, meanwhile operating profits are projected to reach $66bn – up from $61.9bn last year.
However, IATA has adjusted its previous forecast that total airline industry revenues will exceed $1tn this year.
The association now anticipates total revenues to reach $979bn – still a “record high” estimate, it said – up 1.3% compared to 2024.
Total passenger numbers are also expected to reach a record of 4.99 billion despite IATA’s previous projection that this figure would exceed 5 billion by the end of 2025.
Meanwhile total air cargo volumes are expected to reach 69 million tonnes – an increase of 0.6% on last year’s total.
But the price of jet fuel is set to continue adding to airlines’ total expenses, which IATA predicts will grow to $913bn by the end of 2025.
Traditional aviation fuel is expected to average $86 per barrel this year – well below 2024’s average of $99.
IATA said this translates into a total fuel bill of $236bn, accounting for 25.8% of all operating costs, which is $25bn lower than the $261bn in 2024.
And despite expectations that sustainable aviation fuel (SAF) production will grow, SAF usage is only projected to account for 0.7% of all fuel used, said the association.
According to IATA, the average cost of SAF in 2024 was 3.1 times that of traditional jet fuel.
In 2025, the cost of SAF is expected to be 4.2 times that of traditional jet fuel on average.
Willie Walsh, IATA’s director general, 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.”
He continued: “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,” Walsh added.
“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.”
