Global airline industry to record net profit of $36.6 bn in 2025: IATA

The global airline industry is projected to report a net profit of $36.6 billion in 2025, slightly higher than expected this year, helped by lower oil prices and cost control, IATA said on Tuesday.

Passenger numbers are expected to rise 6.7 per cent to 5.2 billion next year compared to 2024. In 2025, the International Air Transport Association (IATA) expects the industry's revenue to cross the $1 trillion mark for the first time to $1.007 trillion, which will be an increase of 4.4 per cent compared to 2024.

While the operating profit is estimated at $67.5 billion, expenses are anticipated to reach $940 billion next year.

 

At a briefing here, IATA Director General Willie Walsh said India is witnessing significant growth and that there is a clear recognition that growth is also dependent on air connectivity.

China and India are among the fastest-growing domestic aviation markets, he added.

"Net profit is expected to be $36.6 billion in 2025 for a 3.6 per cent net profit margin. That is a slight improvement from the expected $31.5 billion net profit in 2024 (3.3 per cent net profit margin).

"Average net profit per passenger is expected to be $7 (below the $7.9 high in 2023 but an improvement from $6.4 in 2024)," IATA said in its financial outlook for 2025.

In the Asia Pacific region, a slight improvement in profitability is likely next year on the back of strong demand and increasing load factors.

Globally, IATA said the average airfare, including ancillaries, is expected to be $380, which is 1.8 per cent lower than 2024.

"We are expecting airlines to deliver a global profit of $36.6 billion in 2025.

"This will be hard earned as airlines take advantage of lower oil prices while keeping load factors above 83 per cent, tightly controlling costs, investing in decarbonisation, and managing the return to more normal growth levels following the extraordinary pandemic recovery," Walsh said.

In 2025, jet fuel price is expected to average $87 per barrel compared to $99 per barrel in 2024. This is based on a jet fuel crack spread of $12 per barrel and a crude oil price of $75 per barrel (Brent).

"Airlines' cumulative fuel spend is expected to be $248 billion, a decline of 4.8 per cent despite a 6 per cent rise in the amount of fuel expected to be consumed (107 billion gallons). Fuel is expected to account for 26.4 per cent of operating costs in 2025, down from 28.9 per cent in 2024," IATA said.

At the same time, Walsh said there are supply chain challenges, infrastructure deficiencies, onerous regulations and a rising tax burden.

IATA also mentioned that net profitability will 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.