IATA forecasts stronger airline profitability amid persistent supply chain issues

Willie Walsh, IATA’s Director General, stated: “We’re expecting airlines to deliver a global profit of $36.6 billion in 2025... All these efforts will help mitigate several drags on profitability which are outside of airlines’ control.”

Walsh also highlighted the significance of reaching over $1 trillion in industry revenues: “It’s also important to put that into perspective... But remember that airlines carry $940 billion in costs... With margins that thin, airlines must continue to watch every cost.”

The IATA emphasized the economic benefits of growing connectivity, projecting airline employment to grow to 3.3 million by 2025 and noting aviation's contribution of $4.1 trillion in economic impact.

“Looking at 2025... This growth means that aviation connectivity will be creating and supporting jobs across the global economy,” said Walsh.

Lower jet fuel prices and efficiency gains are expected drivers for improved financial performance; however, unresolved supply chain issues may constrain growth opportunities and elevate costs.

Passenger revenues are anticipated at $705 billion with ancillary services contributing an additional $145 billion in revenue. Cargo revenues could reach $157 billion with demand likely growing by 6%.

Costs overall are expected to rise by 4%, driven primarily by non-fuel expenses such as labor costs and maintenance due to aircraft groundings and an aging fleet.

The industry faces significant risks from geopolitical tensions and economic uncertainties including potential impacts from policies under the incoming Trump Administration in the US.

All regions are forecasted to show better financial performance compared to previous years, though profitability will vary widely among carriers and regions.

A recent public opinion poll revealed high satisfaction among travelers regarding air travel's value and impact on their lives.

The air transport sector remains committed to achieving net zero CO2 emissions by 2050, with travelers expressing confidence in this goal.