IATA: Airlines Expected to Fly Higher in 2025, But Still Face Turbulence Ahead

The global airline industry is projected to post a net profit of USD 36 billion in 2025, according to new estimates shared by the International Air Transport Association (IATA) at its Annual General Meeting in Delhi. That’s a modest improvement over the USD 32.4 billion profit forecast for 2024, as airlines continue to recover from the COVID-era slump and adjust to a new operating normal.

The image shows a large conference stage with a speaker at a podium. Behind the speaker, there is a large screen displaying a presentation slide. The slide reads "2025 profit $36 billion = $7.20 / passenger" in blue text. The stage is decorated with blue and white colors, and there are two people seated at a table with microphones. Bright stage lights are visible at the top of the image.

IATA DG Willie Walsh addressing delegates at the IATA AGM 2025 in Delhi.

Revenue Rises, Margins Still Slim

Airline industry revenues are expected to grow to USD 979 billion in 2025, edging closer to the coveted trillion-dollar mark. Passenger numbers are also set to rise to 4.99 billion in 2025. That’s good news, but it doesn’t mean the industry is out of the woods yet.

Despite the positive momentum, profit margins remain tight. The net profit margin forecast for 2025 stands at 3.7%, representing only a slight improvement over the 3.4% earned in 2024. In other words, airlines will earn about USD 7.2 per passenger in 2025—not exactly soaring returns in an industry with high costs and thin buffers.

Costs Keep Climbing

Total expenses for airlines are expected to touch USD 913 billion in 2025, below the earlier projected USD 940 billion, but 1% up from 2024. Rising labour costs, volatile fuel prices, and supply chain disruptions are all contributing to the pressure on bottom lines. Fuel alone is expected to account for nearly USD 236 billion of 2025’s expenses. This is lower than the earlier projection of USD 261 billion for 2025, on the back of a reduction in fuel prices,

While unit revenues are expected to increase slightly, costs per available seat kilometre (CASK) will continue to rise as well, meaning efficiency improvements will be critical.

Bottomline

The global aviation industry is stabilising, but profitability remains elusive for many carriers. With strong demand tailwinds, particularly from passengers, the outlook is positive, but not without its headwinds. For frequent flyers, this means more route choices and potentially more capacity, but don’t expect deep discounts across the board. Airlines are still watching the bottom line closely.

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