IATA Forecasts $1T Revenue, 5B Passengers in 2025
The International Air Transport Association (IATA) has unveiled a promising financial outlook for the global airline industry in 2025, forecasting significant growth in both profitability and passenger traffic. For the first time in aviation history, annual passenger numbers are expected to surpass the five billion mark, while industry revenues are projected to exceed $1 trillion.
At IATA’s 2024 Global Media Day in Geneva, Switzerland, Director General Willie Walsh announced that global airlines are anticipated to achieve net profits of $36.6 billion in 2025, based on a 3.6% net profit margin. This marks a slight improvement from the expected $31.5 billion net profit in 2024, which had a 3.3% margin. Walsh highlighted that the average net profit per passenger is expected to reach $7.0 in 2025, a decrease from the $7.9 peak in 2023 but an increase from $6.4 in 2024.
Total industry revenues are set to hit $1.007 trillion, a 4.4% rise from 2024, marking the first time annual revenues have breached the trillion-dollar threshold. Operating profits are also projected to grow, with an expected $67.5 billion and a net operating margin of 6.7%, up from 6.4% in 2024. Despite these positive figures, expenses are forecasted to increase by 4.0% to $940 billion. The return on invested capital (ROIC) for the global airline industry is predicted to improve to 6.8% in 2025, up from 6.6% in 2024, though still below the weighted average cost of capital.
Passenger numbers are expected to rise to 5.2 billion in 2025, a 6.7% increase from 2024, marking a historic milestone for the industry. Cargo volumes are also anticipated to grow, reaching 72.5 million tons, up 5.8% from the previous year. Walsh emphasized that this growth will be driven by lower oil prices, maintaining high load factors above 83%, strict cost controls, investments in decarbonization, and a return to normal growth levels post-pandemic. These measures aim to mitigate challenges such as persistent supply chain issues, infrastructure deficiencies, stringent regulations, and increasing tax burdens.
“We’re expecting airlines to deliver a global profit of $36.6 billion in 2025,” Walsh stated. “This will be hard-earned as airlines take advantage of lower oil prices while keeping load factors above 83%, tightly controlling costs, investing in decarbonization, and managing the return to more normal growth levels following the extraordinary pandemic recovery.”
IATA’s outlook also underscores the strategic importance of the airline industry to the global economy. With industry revenues surpassing $1 trillion, airlines now contribute almost 1% to the global economy, highlighting their role as a vital economic driver. However, Walsh noted that airlines face significant costs amounting to $940 billion, including interest and taxes, resulting in a slim net profit margin of just 3.6%. “The buffer between profit and loss, even in the good year that we are expecting in 2025, is just $7 per passenger,” he explained. This thin margin necessitates continuous vigilance in cost management and efficiency improvements across the supply chain.
Looking ahead, Walsh highlighted the broad economic benefits of increasing aviation connectivity. IATA airlines are at the core of a global aviation value chain that employs 86.5 million people and generates $4.1 trillion in economic impact, accounting for 3.9% of global GDP as of 2023. Employment within the airline sector is expected to grow to 3.3 million by 2025, supporting jobs in hospitality, retail, and numerous other industries that benefit from enhanced connectivity.
Marie Owens Thomsen, IATA’s Chief Economist, expressed optimism about the financial performance, stating, “All of this gives us a financial performance which I think is absolutely worth popping the champagne for after a post-pandemic rebound.” Despite ongoing challenges such as unresolved supply chain issues and rising tax rates, the outlook for 2025 remains positive, driven by strategic investments and operational efficiencies.
IATA’s 2025 financial outlook paints a robust picture for the global airline industry, marked by unprecedented passenger numbers and revenue milestones. As airlines navigate the complexities of a recovering global economy, their role in driving economic growth and connectivity remains indispensable. For more detailed insights and updates, stakeholders are encouraged to follow IATA’s official communications and reports.
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