Net profits of Airline Industry Revised Downwards: IATA

Amidst prevailing global uncertainties due to trade tensions, the net profits of global airline industry have been revised downwards in 2025 by the International Air Transport Association (IATA).

Announcing the updates to its 2025 airline industry financial outlook, IATA on Monday said that though there was improved profitability, from 32.4 billion in 2024 to $36 billion in 2025, it was slightly down on the previously projected $36.6 billion in December 2024.

Net profit margin at 3.7%, improved from the 3.4% earned in 2024 and the previously projected 3.6%. Return on invested capital at 6.7%, improved from the 6.6% earned in 2024 and largely unchanged from previous projections.

Operating profits at $66 billion, improved from an estimated $61.9 billion in 2024, but down from the previously projected $67.5 billion. The total revenues at a record high of $979 billion, +1.3% on 2024, but below the $1 trillion previously projected, IATA said.

Total expenses at $913 billion were higher by 1% in 2024, but below the previously projected $940 billion. Total traveller numbers reaching a record high 4.99 billion (+4% on 2024, but below the previously projected 5.22 billion).
IATA Director General Willie Walsh said that 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 their 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,” he said.

 The result has been 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, he added.

Outlook Drivers

Gross Domestic Product (GDP) is the traditional driver of airline economics. However, although global GDP growth is expected to fall from 3.3% in 2024 to 2.5% in 2025, airline profitability is expected to improve.

This was largely on the back of falling oil prices. Meanwhile, continued strong employment and moderating inflation projections are expected to keep demand growing, even if not as fast as previously projected.

Efficiency is another significant driver of the outlook as passenger load factors are expected to reach an all-time high in 2025 with a full-year average of 84%, as fleet expansion and modernisation remains challenging amid supply chain failures in the aerospace sector.

Overall, total revenues are expected to grow by 1.3%, outpacing a 1% increase in total expenses, shoring up industry profitability, IATA said.

Passenger Revenues

Passenger revenues were expected to reach $693 billion in 2025 (+1.6% on 2024), an all-time high. This will be bolstered by an additional $144 billion in ancillary revenues (+6.7% on 2024).

Passenger growth (measured in Revenue Passenger Km/RPK) is expected to be 5.8%, a significant normalization after the exceptional double-digit growth of the pandemic recovery.

It is expected that passenger yields will fall by 4% compared with 2024. This is largely reflective of the impact of lower oil prices and strong industry competition. This will continue the trend of travellers benefiting from ever-more affordable air travel. The real average return airfare is expected to be $374 in 2025, which was 40% below 2014 levels.

Cargo Revenues

Cargo revenues are expected to be $142 billion in 2025 (-4.7% on 2024). This was primarily based on the expected impact of reduced GDP growth largely influenced by trade-dampening protectionist measures, including tariffs.

As a result, air cargo growth is expected to slow to 0.7% in 2025 compared with 11.3% in 2024. The cargo yield is also expected to reduce by 5.2%, reflecting a combination of slower demand growth and lower oil prices.