Aviation Industry Set for Stronger Profits in 2025: IATA

Despite growing global economic uncertainty, the aviation industry is poised for stronger profitability in 2025, according to a new forecast by the International Air Transport Association (IATA). The association projects airline industry net profits to rise to $36 billion in 2025, up from $32.4 billion in 2024, even as global GDP growth slows to 2.5% from 3.3% the previous year.

IATA’s updated outlook highlights expected improvements in revenue, operating profits, and net profit margins. The industry’s net profit margin is forecast to grow to 3.7% in 2025 from 3.4% in 2024. While some figures are slightly lower than earlier projections—such as total revenue now expected to reach $979 billion rather than the $1 trillion previously forecast—the gains are supported by key efficiencies.

Two primary factors are driving this positive momentum: lower fuel prices and improved operational efficiency. Jet fuel is expected to average $86 per barrel in 2025, down from $99 in 2024, contributing to a $25 billion reduction in the total fuel bill. Airlines are also benefitting from reduced hedging activity, allowing them to capitalize on falling energy costs.

Passenger load factors are forecast to hit an all-time high, averaging 84% for the year. This reflects strong demand amid ongoing challenges in fleet expansion due to global aerospace supply chain constraints. With airlines filling more seats per flight, efficiency and profitability are expected to improve across the board.

IATA predicts that North American carriers will generate the highest absolute profits in 2025, while the Asia-Pacific region will see the fastest growth in demand. Revenue passenger kilometers (RPK)—a key indicator of air travel demand—are projected to rise 9% year over year in Asia-Pacific. The surge is driven by relaxed visa policies in countries such as China, Vietnam, Malaysia, and Thailand, which have boosted regional travel.

Airline CEOs speaking at the World Air Transport Summit echoed IATA’s optimism. Air India CEO Campbell Wilson noted that 2025 has been “a year of surprises,” citing political and regional conflicts, including a temporary airspace closure between India and Pakistan. Still, Wilson remains bullish on India’s long-term potential, citing the nation’s position as the world’s third-largest aviation market with 8–10% annual growth.

Adrian Neuhauser, CEO of Latin America’s Abra Group, acknowledged the vulnerability of airlines to global disruptions but said Avianca is seeing strong passenger demand and steady revenue. “When the world sneezes in any way … airlines just get sick very quickly,” he said. “But as of today, we’re still seeing the numbers hold.”

Overall, the 2025 outlook from IATA suggests the global airline industry is proving resilient despite geopolitical tensions, slower economic growth, and inflationary pressures. With stronger load factors, falling fuel costs, and robust regional demand—particularly in Asia-Pacific—the sector is on track to achieve record performance even in a challenging economic climate.

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Sources: AirGuide Business airguide.info, bing.com, cnbc.com