Geneva: The global airline industry stands to achieve a net profit of 36.6 billion dollars in 2025, driven by 5.2 billion passengers taking to the skies, surpassing the anticipated profit for 2024, the International Air Transport Association (IATA) said in its annual forecast. The outlook represents a 16% gain attributed to lower oil prices and effective cost management strategies.
IATA expects revenues to exceed 1 trillion dollars for the first time, up 4.4 per cent from 2024. Operating profits are projected at 67.5 billion dollars, while total expenses are estimated at 940 billion dollars in 2025.
India, China Experience Growth In Aviation Sector By Expanding Connectivity
IATA Director General Willie Walsh highlighted that India and China are experiencing remarkable growth in the aviation sector, driven by expanding air connectivity.
"Net profit is expected to be 36.6 billion dollars in 2025, representing a 3.6 per cent net profit margin, slightly above the expected 31.5 billion dollars net profit in 2024," Willie Walsh said, according to the statement.
Moreover, IATA predicts the average net profit per passenger will be 7 dollars, improving from 6.4 dollars in 2024 but below the 2023 high of 7.9 dollars. Profitability in the Asia-Pacific region may rise due to strong demand and higher load factors.
Global airfares, including ancillary services, are expected to average 380 dollars, a 1.8 per cent reduction from 2024. Fuel prices are projected to decline, with jet fuel averaging 87 dollars per barrel in 2025, compared to $99 per barrel in 2024. This decrease is calculated based on a crude oil price of 75 dollars per barrel (Brent) and a jet fuel crack spread of 12 dollars per barrel.
Lower Fuel Costs But Rising Challenges Ahead
Despite the anticipated rise in fuel consumption by 6 per cent to 107 billion gallons, the total fuel expenditure could drop by 4.8 per cent to 248 billion dollars. Fuel costs are expected to dip 26.4% of operating expenses from 28.9% in 2024.
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However, Walsh cautioned that the industry faces several challenges, including supply chain issues, infrastructure limitations, stringent regulations, and increasing tax burdens. He also pointed out that airlines might encounter higher tax rates in 2025 as they exhaust pandemic-era tax loss carryforwards.
"Airlines will need to work hard to maintain profitability by leveraging lower oil prices, controlling costs, and investing in decarbonization," Willie Walsh said.
Maintaining load factors above 83 per cent will be crucial as the industry transitions to a more stable growth phase following the pandemic recovery. The IATA report underscores a cautiously optimistic outlook for the airline industry, driven by operational efficiency, cost control, and favourable market conditions.
Source-PTI
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