IATA, representing over 300 airlines worldwide, announced at its annual meeting in New Delhi that it now expects global airlines to achieve a combined profit of $36.0 billion in 2025. This figure is a slight dip from its December forecast of $36.6 billion, a revision largely attributed to the ripple effects of burgeoning trade disputes, particularly those initiated by President Donald Trump, and a noticeable decline in consumer confidence.
Despite this moderated outlook, the projected 2025 profit still marks an increase from the $32.4 billion recorded in 2024. This growth is primarily buoyed by a combination of lower oil prices and an unprecedented surge in passenger numbers, indicating a continued robust demand for air travel.
Willie Walsh, IATA's Director General, highlighted the slim margins within the industry, stating, "Earning a $36 billion profit is significant. But that equates to just $7.20 per passenger per segment." This narrow profit margin, he cautioned, offers little buffer against potential future demand shocks or new taxation, especially as the industry stabilizes after the vigorous post-pandemic resurgence in air travel.
Buoyed by strong employment figures and easing inflationary pressures, industry revenues are still anticipated to rise by 1.3% compared to the previous year. However, IATA has modestly trimmed its prior revenue forecast by 2.1% to $979 billion. While this means the industry will have to wait a little longer to hit the $1 trillion mark, the revised figure still represents an all-time revenue record.
A significant factor in the revised outlook is the ongoing impact of protectionist trade measures. President Trump's sweeping tariffs, in particular, have fanned fears of a global economic slowdown, squeezing discretionary spending. This has prompted many consumers, especially in the United States, to defer or scale back their travel plans, directly impacting airline revenues.
Adding to the industry's woes are the "unacceptable" delays in jetliner deliveries. These persistent supply chain disruptions have severely hampered airlines' ability to expand their capacity and meet the surging travel demand in certain regions. Carriers are often forced to keep older aircraft in service longer or pay a premium for increasingly scarce spare parts, driving up operational costs. Walsh expressed the widespread frustration among airlines, noting that many have aircraft either awaiting delivery or grounded due to a lack of components, preventing them from being put into service. He further characterized predictions of these delays extending throughout the decade as "off-the-chart unacceptable."
Total industry expenses for 2025 are now forecast to reach $913 billion, a 1.0% increase from 2024 but below earlier projections of $940 billion. This adjustment is largely due to the mitigating effect of lower fuel prices, which help to offset the rising costs associated with aircraft maintenance.
Cargo operations are also feeling the pinch. IATA predicts a 4.7% drop in cargo revenues to $142 billion in 2025. This decline is primarily attributed to reduced global economic growth and the adverse effects of trade-dampening protectionist measures, including the imposed tariffs.
Regarding the tariffs, Walsh acknowledged that some manufacturers might be tempted to pass these costs on to their customers. However, he warned that such actions would inevitably lead to higher airfares. Ultimately, he concluded, consumers would bear the brunt of any increased costs faced by the industry.