Airline Industry Outlook for 2025

By Emma Farge and Joanna Plucinska

GENEVA (Reuters) – The International Air Transport Association (IATA) has forecasted that global airline revenue will exceed $1 trillion in 2025, with record passenger numbers expected. This optimism comes despite IATA Chief Willie Walsh labeling the current situation regarding aircraft deliveries as "unacceptable."

Airlines worldwide have faced growth challenges due to delays in jet deliveries from Boeing and Airbus. Without new and efficient aircraft, airlines struggle to reduce fuel costs while accommodating increasing passenger volumes.

"We've given them time. I think our patience has run out. The situation is unacceptable," stated Walsh at a news conference in Geneva.

He criticized suppliers for acting like "quasi-monopolies" and profiting from the issues they caused, suggesting the need for enhanced pressure and possibly seeking support to compel suppliers to improve performance.

Despite these challenges, IATA predicts the industry will achieve $36.6 billion in net profit in 2025, up from an expected $31.5 billion in 2024, with 5.2 billion passengers projected to fly.

This forecast marks a significant recovery from a $140 billion loss in 2020 due to the COVID-19 pandemic, largely driven by robust travel demand. Additionally, a decline in jet fuel prices is expected, providing further relief.

Walsh expressed optimism regarding the second term of U.S. President-elect Donald Trump, suggesting that his previous policies benefitted the industry. He mentioned, "The indication is that the second Trump administration is likely to reverse some actions taken under the (Joe) Biden administration," describing it as a net positive for the industry.

However, IATA cautioned that ongoing conflicts in the Middle East and Ukraine may pose risks to the sector's recovery, projecting a 3.4% drop in passenger yields in 2025 compared to 2024.